New "financial backers" are starting to make their mark in the primary market.
Wang Chen plans to travel to Beijing again in early December to discuss investment matters with the Financial Asset Investment Co., Ltd. (AIC) of a bank.
As a fundraising partner of an equity investment institution with the background of a local state - owned enterprise, he hopes to attract investment from the bank's AIC for the proposed artificial intelligence industry investment fund (hereinafter referred to as the "AI fund"). Once the investment from the bank's AIC is in place, they can quickly start the investment work of this new fund, acquire the equity of several technology companies planning to go public, and continue to support these companies to grow and strengthen.
Wang Chen told reporters that these days he has spent a great deal of time and energy constantly revising the fundraising roadshow materials for the AI fund, aiming to successfully persuade the senior management of the bank's AIC to recognize its investment strategy and value during the negotiation process and start the pre - investment due diligence as soon as possible.
The first batch of AICs of the five major state - owned commercial banks were established in 2017, specializing in non - performing asset disposal and debt - to - equity swap business. Since the regulatory authorities allowed AICs to pilot equity investment business in Shanghai in 2020, the equity investment portfolio of bank AICs has been continuously expanding, and they have become an increasingly active new force of LPs (Limited Partners, i.e., fund investors) in the domestic equity investment market.
The "Portrait Report of Active Institutional LPs (Issue 10, 2025)" released by LP Investment Advisor, a research and consulting institution for the private equity and venture capital market, shows that among the top 10 institutions in terms of the number of investment contributions by active LPs in October, Industrial and Commercial Bank of China Financial Asset Investment Co., Ltd. ranked first with six contributions, and Bank of Communications Financial Asset Investment Co., Ltd. tied for third with two contributions.
However, not all equity investment institutions can obtain investment from bank AICs.
Guo Libo, the person in charge of LP Investment Advisor, revealed to reporters that currently, the main investment targets of bank AICs are equity investment funds with the background of state - owned capital, and private equity investment institutions still have difficulty being included in their investment scope.
Wang Chen said bluntly that even for equity investment institutions with state - owned backgrounds, it is by no means easy to obtain investment from bank AICs.
An Overture
At the beginning of this year, the equity investment institution where Wang Chen works decided to launch a new AI fund to support the development of more AI technology R & D companies.
In order to expand the investment scale of the fund, Wang Chen decided to seek investment from bank AICs.
In March this year, the National Administration of Financial Regulation issued the "Notice on Further Expanding the Pilot of Equity Investment by Financial Asset Investment Companies", expanding the scope of equity investment by financial asset investment companies to the provinces where the pilot cities are located. This also made Wang Chen feel that the time to seek fundraising from bank AICs had come.
In the past six months, he has visited three bank AICs successively, introducing to them the specific investment strategies, investment criteria, investment processes, follow - up management, income distribution, and fund liquidation arrangements of the AI fund, as well as his institution's past investment performance and successful project exit cases, hoping to open the door to investment from bank AICs.
But he soon found that the investment from bank AICs largely depends on whether the equity investment institution can be included in their white list.
Guo Libo pointed out to reporters that the "white - listed" institutions identified by bank AICs are mainly long - term cooperative equity investment funds with large asset sizes and extremely outstanding historical investment performance (such as the Distributed to Paid - in Capital (DPI), which mainly measures whether an equity investment fund can recover the investment principal and excess returns). In particular, equity investment institutions with the background of state - owned capital, securities firms, or large industrial groups have greater advantages in terms of trust endorsement.
Zhang Yi, the investment director of a bank's AIC, told reporters that their "white list" mainly includes local industrial investment institutions and local government guidance funds with the background of state - owned capital and asset management scales exceeding 10 billion yuan. If the equity investment funds they initiate receive investment from large insurance companies, it will be an important plus.
This made Wang Chen feel the fundraising pressure suddenly increase. Although the equity investment institution where he works has the background of a local state - owned enterprise, its asset size has not exceeded 10 billion yuan, and it lacks the "support" of investment from large insurance companies, which made him once consider giving up seeking investment from bank AICs.
Fortunately, an AIC of a bank extended an "olive branch". "This is thanks to the fact that the AI fund has several high - quality proposed investment targets," Wang Chen said. These proposed investment targets are mainly AI technology R & D companies that they invested in a few years ago. After years of support, they have met the requirements for an IPO (Initial Public Offering) in terms of finance. However, since the funds holding the equity of these companies are facing liquidation at maturity, the AI fund plans to acquire the equity of these companies and continue to support their business development to a higher level.
The business development and project exit prospects of these AI technology R & D companies have piqued the interest of this bank's AIC.
In early December, Wang Chen will travel to Beijing to conduct a fundraising roadshow with the senior management of this bank's AIC. If the senior management of the bank's AIC recognizes the investment strategy and prospects of the AI fund, the equity investment institution where Wang Chen works will have the opportunity to be included in the "white list" and start the pre - investment due diligence soon.
To secure the investment from the bank's AIC, Wang Chen has done a lot of work: First, in response to the bank's AIC's requirement that its investment proportion reach 20%, he had extensive communications with other LPs and persuaded them to adjust their investment amounts; Second, considering that the bank's AIC does not want to be the "signboard" for the fund's subsequent fundraising, Wang Chen changed his previous approach of "first seeking investment from state - owned capital and then using it to raise funds from social capital". Instead, he first signed investment intention agreements with several private enterprises and then sought investment from the bank's AIC.
The New Force of LPs
One of the reasons why Wang Chen seeks investment from bank AICs is that he believes that bank AICs are becoming a new force of LPs in the Chinese equity investment market.
Data from the China Venture Capital Research Institute shows that from 2021 to 2024, the AICs of the five major state - owned commercial banks cumulatively subscribed to more than 290 billion yuan in equity investment funds, investing in more than 180 equity investment funds in total. This not only solved the financing difficulties of many technology companies during their development but also made bank AICs an important LP force in the equity investment market.
The "Report on the Interpretation of Investors in the Chinese Private Equity Market 2025" shows that last year, the investment scale of banking institutions reached 75.6 billion yuan, a year - on - year increase of 137%, reaching the highest value in the past five years. Among them, bank AICs contributed 74.1 billion yuan in investment, making them the financial "living water" in the private equity investment market.
In September 2024, the National Administration of Financial Regulation successively issued the "Notice on Doing a Good Job in the Expansion of the Pilot of Equity Investment by Financial Asset Investment Companies" and the "Notice on Expanding the Scope of the Pilot of Equity Investment by Financial Asset Investment Companies", allowing the proportion of a bank's AIC investment in a single private equity investment fund to be increased from 20% to 30%, marking a new stage in the LP investment journey of bank AICs.
In the past year, the number of state - owned and private equity investment funds that Zhang Yi has received has more than doubled compared to before. The reason is that more and more equity investment funds hope that bank AICs will subscribe to 30% of the fund's fundraising share at one time to improve the arrival rate of LP investment and optimize the LP structure.
Another practical reason why equity investment funds attach so much importance to bank AICs is that due to factors such as macro - economic fluctuations, private enterprises and high - net - worth investors, the mainstays of the original LP market, have encountered financial difficulties, resulting in frequent delays in LP payments and temporary cancellations of investment. In this situation, bank AICs with strong capital are regarded by them as LPs with "stable investment capabilities", and there is no need to worry about the risk of LP investment default.
After the proportion of investment in a single equity investment fund was increased, a series of new changes have also occurred in the access threshold for bank AICs' LP investment.
Zhang Yi's most direct feeling is that in the past, he would choose to invest in blind - pool funds (funds with undetermined investment projects). However, after the proportion of investment in a single equity investment fund was increased, at the request of the risk control department, he quickly adjusted his investment strategy, requiring equity investment funds to first submit a detailed list of proposed investment projects. After they evaluate the business development prospects and investment value of these proposed investment targets, they will then discuss the specific investment terms.
Recently, when discussing investment matters with several state - owned equity investment institutions, Zhang Yi also required that newly established equity investment funds should establish a dual - GP (General Partner, i.e., fund manager) system. Specifically, as the other GP, the bank's AIC has the right to express opinions on major investment decisions of the equity investment fund and even exercise the "right of veto" when necessary to better control the safety of funds and project investment risks.
Not long ago, he also received a new task - to establish a sub - fund management platform. On the one hand, through digital technology, it can collect various public opinions and public information of equity investment funds and related invested enterprises in a timely manner. Once it is found that there are any illegal operations in equity investment funds and invested enterprises, it will quickly take risk control measures such as withdrawing funds. On the other hand, it can integrate its own industrial resources to help equity investment funds improve the effectiveness of post - investment management and assist technology companies to develop better.
On November 16, Industrial Bank Financial Asset Investment Co., Ltd., the first AIC of a joint - stock commercial bank, was established with a registered capital of up to 10 billion yuan. As bank AICs continue to expand, whether there will be fierce competition in the field of LP investment has attracted much attention in the equity investment market.
Zhang Yi admitted that they have not yet felt fierce competition in investment. After all, currently, the main entities seeking investment from bank AICs are large industrial capital and venture capital institutions with the background of state - owned enterprises. The latter have sufficient reserves of technology company projects, which are enough to absorb the investment from several bank AICs to initiate large - scale equity investment funds with a scale of more than 10 billion yuan. Moreover, if an equity investment fund receives investment from one bank's AIC, it is also a "plus" to attract investment from other bank AICs.
However, different bank AICs also have different access thresholds for LP investment.
In addition to paying attention to whether the previous DPI performance of equity investment funds is significantly higher than the industry average, Zhang Yi also attaches particular importance to the overall success rate of project investment. This is because it is related to whether bank AICs can support more technology companies to succeed and better implement the national strategy of "accelerating high - level scientific and technological self - reliance and self - strength and leading the development of new - quality productive forces".
Solving the Fundraising Dilemma?
Wang Chen told reporters that when he decided to seek investment from bank AICs in early April, he was "interrogated" by several fund partners: "Can bank AICs be the 'new key' to solve the fundraising dilemma in the equity investment market?"
According to Zero2IPO data, under the combined influence of factors such as macro - economic fluctuations and difficult project exits, the fundraising difficulty in the Chinese equity investment market further intensified last year. In 2024, the fundraising scale of the domestic equity investment market was 144.4929 billion yuan, a year - on - year decrease of 20.8%, and the decline was further expanded compared to 15.5% in 2023.
As state - owned capital such as bank AICs have invested in the establishment of several large - scale equity investment funds, the decline in the fundraising scale of the equity investment market has narrowed. In the first quarter of this year, the fundraising scale of the domestic equity investment market was 347.084 billion yuan, a year - on - year decrease of 2.9%, which was narrower than the decline for the whole of 2024.
Behind this is that state - owned LPs such as bank AICs continue to play the leading role in the fundraising end of the equity investment market.
According to the data statistics of Zhizhong, a financial market information technology company, state - owned funds dominate the LP structure, accounting for about 88.8%. Among them, government funds (including local government guidance funds and local state - owned assets) account for 52.5%, and the investment scale of bank AICs is increasing rapidly.
However, there has always been a controversy in the industry about whether state - owned LPs can effectively alleviate the fundraising dilemma in the equity investment market.
Liu Zhou, the founding partner of Fortune Capital, said that the nationalization of LPs can alleviate short - term problems, but it cannot truly solve the long - term problem of difficult fundraising in the equity investment market. The increased investment of social and commercial capital is an important guarantee for the sustainable and healthy development of the equity investment industry.
Zhu Shan, the chairman of Rongzhong, believes that although state - owned LPs are bringing more funds to the equity investment industry, the serious lack of market - oriented LPs cannot be ignored. This situation has led to a polarization in the fundraising end of the equity investment market. In 2024, the number of newly established private equity investment funds with a fundraising scale of about 100 million yuan, mainly funded by market - oriented LPs, accounted for as high as 54.2%, but the total fundraising amount only accounted for 4.33%. In contrast, the number of newly established equity investment funds with the background of state - owned capital and a scale of more than 10 billion yuan, mainly funded by state - owned LPs, accounted for only 0.43%, but the total fundraising amount reached 17.08%. The huge contrast between the two has led to the near - standstill of many private small and medium - sized equity investment funds and a significant reduction in their investment frequency, which has invisibly weakened the coverage of equity investment funds in supporting the growth and development of science and technology companies.
A person in the industry said that if bank AICs enhance their market - oriented operation in LP investment, it will not only bring more funds to private equity investment funds but also effectively alleviate the polarization in the fundraising end of the equity investment market.
Regarding the market - oriented operation of LP investment business, bank AICs are still "groping for stones to cross the river".
In the first half of this year, the AIC of the bank where Zhang Yi works recruited several people with work experience in well - known venture capital institutions to be responsible for the LP investment cooperation business. However, the equity investment institutions they recommended, due to the lack of the background of state - owned capital or large industrial capital, had difficulty passing the review of the risk control department, resulting in these people leaving the company one after another in the second half of the year.
"Behind this is that there are still many areas where the traditional risk - control culture of banks needs to be coordinated with the market - oriented operation of equity investment business," Zhang Yi said. Currently, he is trying to persuade the senior management of the bank's AIC to include some market - oriented equity investment institutions that have excellent investment capabilities and performance, asset management scales exceeding 10 billion yuan, and are at the forefront of the industry into the "white list".
Guo Libo pointed out that if bank AICs enhance their market - oriented operation in LP investment, they also need to appropriately "delegate power". In order to control project investment risks, bank AICs will adopt a dual - GP management mechanism when making investments. However, under the market - oriented operation mechanism, LPs should hand over all project investment decision - making rights to professional equity investment institution managers.
This article is from the WeChat public account "Financial Orange", author: Chen Zhi, published by 36Kr with authorization.