A consortium backed by the Chinese government jointly formed a fund of funds with initial capital of 5.5 billion yuan to invest on tech firms, DealStreetAsia reported.
The Pudong Science and Technology Innovation Fund was launched by Shanghai Municipal State-owned Assets Supervision and Administration Commission, China Construction Bank Corp., and Bank of Shanghai Co. Ltd.
It aims to create a pool of industry sub-funds totaling 20 billion yuan. This will be invested in six major areas — integrated circuits, smart manufacturing, aviation and aerospace, innovation in medicine, autonomous vehicles, and big data.
Four state-owned high-tech park operators and developers in Shanghai such as Shanghai Zhangjiang Group will lead the fundraising process for the sub-funds and will raise capital from the private sector. The funds are expected to start investing this year.
The fund launch follows that of China's STAR market, which showcases some of the country's most promising tech companies and hopes to catch up to the U.S. Nasdaq. It began trading in July with 25 listed companies and as of September had 64 listings. It aims to improve market liquidity and China's tech self-sufficiency.
As of Oct. 10, US$1 was equivalent to 7.12 yuan.