the busiest state-owned assets

It is learned from PE Daily - Decoding LP that Shanghai SDIC Pilot Fund recently released an announcement, stating that its two mother funds, the Biomedicine Mother Fund and the Integrated Circuit Mother Fund, plan to participate in the investment of a total of 7 sub-funds, the list includes: Qiming Venture Partners, Xinxi Capital, Cathay Capital, Kanjun Capital, Xingze Capital, Kunqiao Capital, Zhiwei Capital.

This is the first public announcement of selected projects after Shanghai SDIC Pilot Fund launched the regular selection mechanism.

Looking back at the first half of the year, Shanghai's three major pilot industrial mother funds have leveraged more than 250 billion yuan of social capital in total, with a leverage ratio of over 6 times. This is a vivid portrayal of Shanghai's efforts to seize the emerging industry track.

Shanghai SDIC Plans to Invest in 7 Funds

Back in March this year, Shanghai SDIC Pilot Fund issued an announcement, officially launching the regular selection mechanism for sub-fund managers. This means that the previous batch-based selection model has been officially transformed into a regular model, allowing investment institutions to submit applications at any time.

According to the announcement, the sub-funds shall be equity direct investment funds established or relocated within Shanghai, focusing on supporting the three major pilot industries, and encouraging cooperation with leading chain-owner enterprises to set up funds.

The processes of fundraising and investment have also been further streamlined — For special funds established within the business scope or funds in the fundraising period, the requirements for capital contribution ratio and evaluation procedures have been relaxed. More importantly, it supports setting differentiated hurdle rates and management fee accrual conditions for outstanding GPs, especially for funds investing in seed-stage and start-up technology enterprises, giving greater tolerance and flexibility, so as to "let professionals do professional things".

Soon, the first public announcement of selected projects after the regular selection mechanism was released — 7 GPs covering the two major pilot industries of biomedicine and integrated circuits.

Among them, the Biomedicine Mother Fund plans to invest in 5 sub-funds, namely Shanghai Qiming Rongkang Private Equity Partnership (Limited Partnership), Shanghai Xinxi Life Science Investment Partnership (Limited Partnership) (to be established), Cathay (Shanghai) Nutrition and Health Fund (to be established), Kanjun Capital (Phase IV) Venture Capital Partnership (Limited Partnership) (to be established) and Xingze Phase V Medical Industry Investment Fund Management Partnership (Limited Partnership) (to be established).

The Integrated Circuit Mother Fund plans to invest in 2 sub-funds, namely Kunqiao Phase III (Shanghai) Technology Industry Equity Investment Partnership (Limited Partnership) (to be established) and Shanghai Zhiwei Lingfeng Venture Capital Partnership (Limited Partnership) (to be established), with the institutional brands being Kunqiao Capital and Zhiwei Capital respectively.

Looking back at July 2024, Shanghai officially established three major pilot industrial mother funds with a total scale of about 900 billion yuan, covering the three sectors of integrated circuits, biomedicine and artificial intelligence, and Shanghai State-owned Assets Investment Co., Ltd. acts as the manager of the mother funds.

Since its establishment, the Shanghai SDIC Pilot Mother Fund has maintained active investment. Data shows that the subscribed scale of funds under the management of Shanghai SDIC Pilot has exceeded 100 billion yuan, with a total cumulative investment decision amount of 56.6 billion yuan and a total cumulative capital contribution amount of 34 billion yuan. It has gathered more than 30 chain-owner enterprises and nearly 60 head fund ecosystem resources — not only has it deployed a number of strategic and market-oriented CVC funds, but also successfully attracted leading institutions such as CAS Star and BlueRun Ventures to set up funds in Shanghai for the first time, injecting precious fundraising liquidity into the primary market.

The Busiest State-owned Capital Player

While market-oriented funds are generally shrinking, the capital of Shanghai's state-owned assets not only has a large volume, but also has a long term and stable style. Among them, the Shanghai SDIC Pilot Mother Fund has quietly become a source of "long-term capital" that GPs are competing for — it not only has three major pilot industrial mother funds for integrated circuits, biomedicine and artificial intelligence, but also has a future industry fund.

PE Daily obtained a set of data: as of the end of June, Shanghai SDIC had 37 funds under management, with a subscribed scale of nearly 300 billion yuan. In the first half of the year, the number of newly added investment decision-making projects exceeded 180, with an amount of over 45 billion yuan, accounting for about 80% of the total investment decision-making scale of last year. The total social capital leveraged by its managed mother funds has exceeded 250 billion yuan, with a leverage ratio of over 6 times.

More importantly is the flow of funds. In the first half of the year, Shanghai SDIC's managed funds made 220 new capital contributions, of which more than 60% went to the integrated circuit industry, more than 30% went to the artificial intelligence industry, and 100% focused on the "2+3+6+6" industrial layout.

"We do not aim to be the tallest tree, but to be the fertile soil" — this is the strategy of Shanghai SDIC, and also an important part of the construction of Shanghai Science and Technology Innovation Center. In the first half of this year, the output value of the three major pilot industrial manufacturing sectors in Shanghai increased by 14.5% year-on-year. Among them, the output value of integrated circuit manufacturing increased by 19.5%, artificial intelligence manufacturing by 21.8%, and biomedicine manufacturing by 7.2%.

A highly imaginative technological landscape is gradually unfolding in Shanghai. Star IPO companies such as Biren Technology, MiniMax, and MetaX were born in Shanghai, the super unicorn Shanghai Enflame Technology is also about to land on the Sci-Tech Innovation Board, and a number of hard-core technology companies such as Agibot, Fourier Intelligence, Stepfun, Wuren Qiongxin, Star Charge Energy, Eastrise Fusion, and Nova Fusion have all taken root here.

The logic behind it is not difficult to understand: when a city has sufficient patience, a sufficiently complete industrial chain and a sufficiently clear industrial direction at the same time, capital and talents will naturally flow here.

As stated in the front page of People's Daily: Shanghai is committed to enhancing the courage to "take proactive actions", with the government providing "safety net support" and systems "breaking through barriers", to steadily build a global science and technology innovation highland. A long-term layout for future industries is clearly emerging.

This article is from the WeChat official account "PE Daily", author: Zhou Jiali, authorized for release by 36Kr.