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Tianjin Development Zone leads private equity investment in China

The office of the National Development and Reform Commission of China approved applications for the record from 13 venture investment management enterprises in December 2009, including Qianxin Culture & Investment Management.

This is the third batch of enterprises receiving approval for the record from the NDRC following CDH Investments (Tianjin) and Hony Capital (Tianjin) getting approval in June 2008 and seven venture investment management enterprises, including CCB Healthcare Investment Management (Tianjin), getting approval in April 2009.

There were a total of 22 enterprises getting approval for the record, including 16 equity investment fund management enterprises the NDRC implemented and tried beforehand in Tianjin Binhai New Area, with 13 based in the Tianjin Development Zone and three based in other areas within Binhai New Area.

Since the newly revised law of partnership established the parameters of the limited partnership form in 2007, the development of private equity funds has been protected by law.

Tianjin Development Zone completed the commercial registration of the city’s first equity investment fund enterprise in 2007. Then, the Tianjin Administration for Industry and Commerce issued measures for the commercial registration management of private equity fund enterprises and private equity investment fund management limited companies.

As of the end of December 2009, Tianjin Development Zone owned 174 private equity funds/fund management enterprises, as well as realised subscribed capital contributions of RMB47bn (approx USD6.89bn) and real capital contributions of RMB7.5bn (approx USD1.10bn). In addition, 20 per cent of fund enterprises began their investment into projects.

Among the funds managed by the 13 fund management enterprises which received approval from the NDRC, ten funds began to invest in industries such as healthcare, energy, property, M&A and reorganisation of state-owned enterprises, equipment leasing and culture and media; two funds received investment of RMB2bn (approx USD293m) from the National Social Security Fund of China respectively; three funds invested in projects in Tianjin; seven funds’ investors came from large and medium-sized institutions; and three funds began their tax payments.

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