850 Billion Yuan: The Birth of Nanjing's Super State-owned Capital

A state-owned platform of aircraft carrier level has been born in Jiangsu.

As learned by Investment & LP from the founding conference of Nanjing Investment Holding Co., Ltd. held in early September, Nanjing Investment Holding was officially established, aiming to build a state-owned capital investment and operation group with strong capital operation capabilities.

After absorbing the equity of multiple groups held by the Nanjing Municipal State-owned Assets Supervision and Administration Commission, the restructured Nanjing Investment Holding has a total asset of over 850 billion yuan.

Source: Nanjing Daily

In response to this, the two major state-owned venture capital platforms of Pudong launched a merger this month. A wave of local state-owned assets integration and restructuring is approaching.

850 Billion Yuan: Nanjing's Super State-owned Platform Unveiled

The new state-owned "aircraft carrier" has impressive strength.

Specifically, Nanjing Investment Holding takes the original Nanjing State-owned Assets Group as the main body, injects all the equity of Nanjing Urban Construction Group, Transportation Group, Southeast Group and Venture Capital Group (66.67%) held by Nanjing Municipal SASAC, and at the same time gradually adjusts the equity of Venture Capital Group and Mixed Ownership Reform Fund held by Nanjing Zitou Group to Nanjing Investment Holding, and makes capital increase to Nanjing Zitou Group and Venture Capital Group at the appropriate time.

After the restructuring is completed, Nanjing Investment Holding will have total assets exceeding 850 billion yuan and registered capital of 60 billion yuan. According to further plans, the asset scale is expected to exceed 1 trillion yuan by 2030, with operating revenue exceeding 100 billion yuan.

The underlying logic is self-evident: through asset integration, system restructuring and function reengineering, it will coordinate resources including industry, finance, technology and capital, and build a comprehensive platform integrating major project investment, industrial fund investment, modern financial services and state-owned capital operation.

"Establishing Nanjing Investment Holding and deepening the reform of Nanjing Venture Capital Group is the practical action of the Municipal Party Committee and Municipal Government to thoroughly implement the spirit of General Secretary Xi Jinping's important exposition on state-owned assets and state-owned enterprises. It is conducive to deepening the new round of reform of state-owned assets and state-owned enterprises, improving the city's strategic investment capacity, conforming to the law of capital empowerment, and giving better play to the strategic supporting role of state-owned capital in urban development." Zhou Hongbo, Secretary of the Nanjing Municipal Party Committee, said at the conference.

It is understood that in this round of restructuring, Nanjing will implement upgraded management of the Venture Capital Group, which will be directly supervised by the Municipal SASAC. The municipal level will jointly optimize the supervision mechanism of the Venture Capital Group, implement comprehensive measures from improving the corporate governance structure, expanding authorization and delegation of power, establishing a precise assessment orientation, improving the incentive and restraint system, and strengthening the coordinated guarantee of resources, so as to continuously improve the operation efficiency and professional investment capacity of the Venture Capital Group.

The establishment is not a simple "patchwork", as three major business clusters are gradually taking shape —

In terms of the Equity and Fund Investment Cluster, with Nanjing Venture Capital Group as the core, the equity of the mixed ownership reform fund will be injected to build a "4+N" industrial fund matrix, providing full-chain equity financing services including angel, VC, PE, Pre-IPO, M&A and private placement.

In terms of the Modern Financial Service Cluster, Nanjing Zitou Group will divest non-financial assets, increase equity investment in financial enterprises such as banks, securities, insurance and trusts, improve its control over financial institutions, give full play to the efficiency of full financial license resources, focus on the integration of industry and finance, and provide diversified financial services for the real economy.

In terms of the State-owned Capital Operation Cluster, it will build a professional operation sector to make up for the shortcomings of state-owned capital operation, give full play to the advantages of spatial carriers, rely on its own industrial parks and office buildings to establish a "investment + incubation + landing" coordination mechanism, so as to realize the mutual promotion of post-investment management and carrier operation.

In addition, Nanjing Investment Holding has also built a coordination mechanism of "capital end + project end + risk control end": Nanjing Zitou Group provides full-chain financial services, Nanjing Venture Capital Group provides equity financing services, and groups such as urban construction and transportation provide support for invested enterprises in scenario application and industrial landing. Through the above collaborative model, it provides full life cycle services for strategic emerging industries, and promotes the in-depth integration of industrial chain, innovation chain and capital chain.

The Era of Large-scale State-owned Assets

The pace of state-owned assets integration in recent years is impressive.

Over the past few years, government-guided funds have sprung up, but situations where multiple departments contribute separately and multiple platforms operate separately have occurred from time to time. At the critical node of industrial upgrading, state-owned assets restructuring centered on centralized integration has become the only effective way to revitalize existing assets and improve efficiency.

As early as December last year, Zhang Yuzhuo, Director of the State-owned Assets Supervision and Administration Commission of the State Council, published a signed article in People's Daily, proposing to strengthen strategic and professional restructuring, and increase efforts to merge "similar items" around strengthening functional missions and improving scale benefits. In response, the wave of state-owned assets and state-owned enterprises integration across the country is quietly unfolding.

In the latest development, two major state-owned venture capital platforms in Pudong launched an equal merger. The Pudong New Area SASAC transferred 91.3% of the equity it holds in Pudong Kechuang Group to Shanghai Pudong Innovation Investment Development (Group) Co., Ltd., making Pudong Venture Capital Group the controlling shareholder of Pudong Kechuang Group, with the ultimate actual controller still being the Pudong New Area SASAC.

Pudong Venture Capital was established in September 2023. It builds an investment system covering the full life cycle of science and innovation enterprises around angel investment, industrial investment, strategic investment and fund investment. At present, the scale of its ecological funds has reached about 600 billion yuan. Pudong Kechuang was established in 2015, forming an integrated business model of "investment, loan, incubation and guarantee", and has accumulated professional investment teams and existing projects.

On the whole, Pudong Venture Capital, which has a large capital volume, serves as the overall coordinating platform, and Pudong Kechuang, which has many years of experience in hard technology investment, is incorporated into it, thus forming a comprehensive state-owned venture capital system covering FOF, industrial funds, direct investment, technology finance and market-oriented fund management.

Similarly, Huai'an Innovation Investment Group Co., Ltd. was officially unveiled in early August. Multiple fund management entities that were previously scattered, including Guolian Private Equity Fund, Hua Shang Yingcai Venture Capital and Huai Jin Venture Capital, were integrated into Huai'an Financial Development Group to form a unified professional fund platform with managed funds of about 15.5 billion yuan.

Looking further back, the scenario of Shanghai's state-owned assets integration in 2024 is still vivid in our minds — 100% of the equity of Shanghai Science and Technology Innovation Group held by the Shanghai Municipal SASAC was transferred to Shanghai State-owned Capital Investment Co., Ltd., and a super state-owned platform rose up as a result.

After that, Changsha State-owned Industrial Holding Group was unveiled, Zhengzhou Industrial Investment Group was successfully established, Zhuhai Science and Technology Industry Group was launched, Jiangsu Guojin Investment Group was registered... A number of innovative samples of local state-owned assets building industrial development platforms have emerged one after another.

This is undoubtedly a steady stream of vitality for science and innovation enterprises: a unified platform usually builds a multi-level fund matrix covering angel, venture capital, industry and M&A, covering the whole life cycle of enterprises from the seed stage to the mature stage, bringing more linkage empowerment from the state-owned assets system to relevant enterprises.

We are witnessing the birth of a super state-owned assets era.

This article is from the WeChat official account "Decoding LP", author: Yu Mengying, published with authorization from 36Kr.