Shenzhen Capital aims to double assets

Shenzhen Capital Group Co Ltd, China's top venture capital firm, aims to double its funds under management to more than 20 billion yuan ($2.48 billion) in three years by setting up more yuan investment funds and attracting more shareholders.
The firm aims to complete its plan to raise more than 1 billion yuan from its existing shareholders and other mainland investors this year, and is planning to set up another 3-5 billion yuan investment fund in future, president Wilson Lee told Reuters in an interview.
"It is possible to see our scale doubled in three years," Lee said. He said funds under its own management can be grown to more than 8 billion yuan in three years, external funds could grow to 10 billion yuan, and foreign investment funds to about 2 billion yuan. He gave no comparison. Shenzhen Capital has set up more than 20 investment funds in major Chinese cities such as in Suzhou and Chongqing with local governments, and has teamed up with Singapore bank UOB Ltd and institutions from Japan and Israel to set up various investment funds.
Lee said the firm was currently in talks with governments in more than 10 Chinese cities for setting up funds. The firm invests in about 50 projects a year but many of the investments have to be through teams with partners as it is limited by scale.
The firm is considering setting up a bigger fund to capture the opportunities, especially in projects relating to new energy, environmental protection, and modern agriculture, Lee said. Shenzhen Capital aims to list 10 companies every year in the next few years in China, which has resumed IPO approvals after quietly suspending them last year during the market slump. The planned launch of a Nasdaq-style second board later in the year would make it easier to achieve its listing goal, Lee said.
"IPO is a major channel for us to exit an investment in future. It is a benchmark of valuation," Lee said. The firm ahd sought listing for 10 companies in 2007, and five in 2008. The firm's major shareholders include state-owned Assets Supervision and Administration Commission, Dazhong, Guangzong Electric and ZTE.
As more overseas and cash-rich Chinese firms set up funds in China to tap potential opportunities in the country, Li expected competition to intensify but said the firm's expertise and existing large network across the nation will be differentiating factors. US private equity firm Blackstone Group LP was in talks with the Shanghai city government to set up a wholly-owned China subsidiary as it prepares to launch a local currency private equity fund, sources said earlier in June.