Huiou (Chongqing) Education Equity Investment Fund, the first of its kind in China, has been officially launched in Chongqing.
China’s education sector has been drawing increasing attention from international investors in recent years, due to the country’s large population base and stable cash flow in the education sector.
In terms of value, China’s educational market makes up just two per cent of the world’s total, while the Chinese student population, from primary school through university level, makes up 17 per cent of the world’s total, according to a report released by the World Bank in 2007.
Spending on education accounted for 17.8 per cent of the total expenditure on consumption of services in Beijing in 2008.
Huiou (Chongqing) Education Equity Investment Fund held an introductory informational meeting on 27 December, marking the prelude to the fund’s series of road shows. Prior to that, many funds and investment institutions expressed strong interest and an intention to invest at an earlier recommendation meeting.
Sources have indicated that the fund’s management team, comprised of a group of professionals who are active players in Chinese and international capital markets, will seek out education and education-related firms engaged in the cultural and media sectors as their main investment targets, aiming at making the fund the leader and the top brand in the field of educational investment in China.
The fund plans to raise a total of RMB5bn (USD735m), with RMB200m-500m (USD29m-74m) for the first phase and RMB2m (USD0.3m) as a fund unit, with an operating period of 5+2 years.
At present, the fund is closely working with the responsible government departments, as well as interested banks, brokerages and other financial institutions in Chongqing, in a move to develop strategic cooperations.
Following a successful completion of the fundraising, the fund plans to support the outstanding performers among its list of target companies in their efforts to go public in the Chinese or international markets when the time is appropriate.
"Strong support from the government, a professional management team, excellent project reserves, close co-operation with professional services firms both in and outside China, as well as the in-depth understanding of the local business environment are among the many advantages of our fund management. A strong sense of commitment and confidence play as the drivers of our fund growth; meanwhile, the pre-referral has laid a solid foundation. We will continue to work closely with more powerful investors to share good opportunities and strong returns brought by China’s booming education industry," a representative of Huiou Fund said.
"We have also established the Huiou Education Charity Fund which aims at helping students without means in the western areas of China in a move to provide access to good educational opportunities for more people."
