China, UK firms to join forces on 100 bln yuan tech fund

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A new 100-billion-yuan (15 billion US dollars) technology investment fund focusing on Chinese companies is being established, with major Chinese investors agreeing to a partnership deal with the UK advisory firm behind Softbank’s Vision Fund.

Two Chinese investment firms – China Merchants Group and SPF Group – will partner with UK-based Centricus to establish the fund, which the three companies said will be predominantly used to invest in and buy Chinese tech companies, as well as some global acquisitions, according to Reuters.

Chinese media suggest that up to 40 percent of funding will come from China Merchants Group’s investment arm (China Merchants Capital Investment Management Co Ltd) and other China-based investors.

Centricus played a key role in advising on the Vision Fund, a 100-billion-US-dollar initiative launched by Japan’s SoftBank. According to the Financial Times, Centricus’ role in the structuring of the Vision Fund saw it secure 60 billion US dollars’ worth of investment from the state funds of Saudi Arabia and Abu Dhabi.

Since being established in November 2016, the Vision Fund has gone on to back unicorns like car-hailing platforms Uber and China’s Didi Chuxing, chip manufacturer Arm Holdings and global co-working giant WeWork.

SoftBank Group founder, c‍hairman and CEO Masayoshi Son in Tokyo, Japan, August 7, 2017. /VCG Photo

Earlier this year, Centricus was also linked to proposals made by football's world governing body FIFA, which plans to expand the Club World Cup and establish the Nations League – a new tournament set up in addition to the World Cup.

A new joint venture will be set up between Centricus and SPF Group, which will manage the new fund alongside a subsidiary of the China Merchants Group. According to the Financial Times, the new fund will be called the “China New Era Technology Fund.”

China Merchants Group is a state-owned enterprise with assets worth 1.1 trillion US dollars under its control, according to its official website.