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August 19, 2009

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Home » Business » Finance

CLSA, Guosheng eye JV for PE fund

Hong Kong-based brokerage CLSA plans a private equity fund with Shanghai Guosheng Group Co, a state-owned investment firm, to collect 10 billion yuan (US$2.1 billion).

The two companies have signed an agreement to set up a 50-50 joint venture - Guosheng CLSA (Shanghai) Industrial Investment Management Co - by the end of this year in Shanghai to launch the yuan-denominated fund, they said in a joint statement yesterday.

The fund will invest in renewable energy, environment protection and consumer-related sectors, and all investors in the fund must be Chinese companies, the firms said.

"There is significant opportunity for private capital in China. Our partnership with one of the flagship investment groups in Shanghai reinforces our belief in the market," CLSA said.

"The JV perfectly complements CLSA's existing joint venture, China Euro Securities Ltd, which is focused on broking and investment banking. With these two JVs, our business in China now reflects the three principle areas of focus - broking, investment banking and asset management," CLSA said.

Two other overseas institutions have announced plans to launch a yuan-denominated fund on China's mainland.

Hong Kong-based First Eastern Financial Investment Group on Monday said it plans to set up a subsidiary in Shanghai to raise 6 billion yuan for a yuan-denominated fund over the next 12 months to grow its investments on the mainland.

United States-based firm Blackstone Group last Friday said it plans to launch a 5 billion yuan fund focusing on Shanghai-based investments, which would be its first regional yuan-denominated PE fund.


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