Two Chinese investment companies and a British asset management firm have established a new 100 billion-yuan ($15 billion) fund that will invest in technology companies around the world, with a focus on China.
Reuters reports that London-based Centricus Asset Management, Hong Kong-headquartered conglomerate China Merchants Group and Beijing-based fund manager SPF Group have come together to form the China New Era Technology Fund.
“With our distinguished partners, we will have unique access to technology investments focusing on China as well as other major global markets,” said Dalinc Ariburnu, co-founder of Centricus.
China Merchants Group and other China-based investors will provide 40 billion yuan for the fund, which will be invested in Chinese technology companies and startups. Centricus and SPF Group will form a joint venture charged with raising the additional 60 billion yuan from governments, institutions and companies around the world, and will target global tech firms for investment and acquisition.
Centricus is a global investment fund that manages $20 billion in assets, according to the company. The firm advises and manages fundraising for the $100 billion SoftBank Vision Fund, which was established in 2016 by Japanese multinational holding conglomerate SoftBank Group.
In the last year, the SoftBank Vision Fund has invested more than $29 billion in tech companies around the world including large amounts into startups, challenging the conventional venture capital-backed method of investment in technology companies.
Through the Vision Fund, SoftBank has invested billions into Chinese mobile transportation platform Didi Chuxing and its US rival Uber, and purchased stakes in US chipmaker Nvidia and New York-based shared workspace startup WeWork.
"The technology revolution is taking place much faster than expected and this is creating a big race for investments in this space,” said Ariburnu. "We are at a stage where size of available funds and the ability to access big markets will be the game changer.”
Last week, the United States-based venture capital firm Sequoia Capital announced the establishment of its own $8 billion global fund to compete with the SoftBank Vision Fund. The firm’s Chinese arm, Sequoia Capital China, will raise more than $2 billion for the fund that will focus on investments in Chinese companies.
“To be the lead investor in a company you can no longer just invest $100 million if you want to build a company that is worth several billion. For that you need $400 million or $500 million,” Neil Shen, founder of Sequoia Capital China, told the Financial Times.
“This is such an exciting development,” said John Zai, founder of Cocoon Network, a financial investment consultancy which operates in the UK and China.
“There are so many good technologies in Europe to transfer back in the China market and vice versa. This will be a game changer, to connect global technology with the biggest market in the world,” he said.