The China Securities Regulatory Commission (CSRC) has granted permission for the establishment of the Mainland’s first venture capital (VC) controlled mutual fund company.
Founded by Shenzhen Capital Group (SCG), the new VC controlled mutual fund company will be branded as Redland Innovation Fund Management, according to asiaasset.com.
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Redland Innovation Fund Management has registered capital of RMB100million (US$16 million). SCG has invested in 91 domestic and overseas listed companies, with average internal rate of return (IRR) of 36%.
The permissions indicates that the financial regulator is looking to diversify the scope of shareholders that control asset managers, from securities brokerages to insurance firms, private equity (PE) and VC, as reported by the news portal.
An analyst from Z-Ben Advisors was quoted by Asia Asset Management that a number of leading Chinese PE firms were seeking to break into the mutual fund industry.
"We foresee more PEs or VCs to come on stream. The newcomers are expected to launch mutual fund products linked with their non-core businesses. The projects are mainly designed for a small group of high net worth individuals," the analyst added.
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