Construction machinery manufacturer Zoomlion is launching a $481 million M&A fund while former NEA China managing director Xiadong Jiang is launching a new $125 million venture fund.
Zoomlion to launch $481m M&A fund
Chinese construction machinery manufacturer Zoomlion Heavy Industry Science and Technology Co., Ltd. has plans to establish an industry investment vehicle with a fundraising target of RMB3.21 billion (US$481 million).
Aimed at capitalising on industrial consolidation and state-owned enterprise reforms, this development comes as Beijing and provincial authorities, in addition to state-owned enterprises (SOE) and industry associations, have been launching industry M&A funds. This comes at a time as China continues to enact SOE reforms and industry consolidation – an initiative forecast to see significant problems.
Recently, 10 state-owned enterprises (SOEs) collaborated to launch a RMB350 billion ($52.5 billion) national fund aimed at helping fund the restructuring of major state-owned enterprises through industry consolidation, in addition to reducing excess capacity.
Named Shanghai Lulian Junhe Industrial Equity Merger and Acquisition and Investment Fund Partnership, this M&A fund is designed to fund and accelerate the strategic transformation and upgrade of Zoomlion. It also aims to promote the development of its financial business.
Limited partners in the fund include a unit of Zoomlion contributing RMB500 million, as well as Greenland Financial Holdings Group, Anhui Railway Development Fund, Jiangsu New Yangzi Shipbuilding, Shanghai Yu’en Environmental Technology Partnership, Shanghai Changtai Investment and other firms.
With a 2 per cent management fee and 20 per cent performance incentive structure, A Zoomlion-linked management company will manage it jointly with its partners, with an investment period of four years and an exit period of three years. This amounts to a fund life of seven years.
VC Xiaodong Jiang launches new $125m fund
According to a regulatory form filed with the SEC, venture capitalist Xiaodong Jiang, who founded the Beijing unit of New Enterprise Associates, has launched a new fund incorporated in the
