CMS officially announced to establish its first direct equity investment fund – Ganzhou CMS Zhiyuan No. 1 Equity Investment Partnership (hereinafter referred to "No. 1 Fund") on September 6 in Ganzhou. No. 1 Fund was established in August 2013 with the approval of China Securities Regulatory Commission, and has raised funds of RMB 3.508 billion, becoming the largest broker direct equity investment fund in terms of market issuance scale in recent two years. This is a big breakthrough against the adverse backdrop of cooling PE market, difficulty in raising fund, and blocked IPO withdrawal channel.

 

Investors of this No. 1 Fund include not only China Merchants Capital and CMS Zhiyuan Capital, but also large enterprise groups such as Ganzhou Development Investment Holding Group, Landsea Group and Hebei Port Group. The investment strategy focuses on the equity investment in or equity-related creditor's rights investment in enterprises, or on the investment in other investment funds related to equity investment. The investment will emphasize on the Pre-IPO and growth projects in which CMS has natural advantages as well as on the competitive industries of China Merchants Group and Jiangxi Province, and focus on rare earth, financial service, energy conservation and environmental protection, new energy, high-end equipment manufacturing, TMT, new materials, biological pharmacy, culture media, and modern agriculture industries.

 

Wang Yan, President of CMS, said in the establishment ceremony of No. 1 Fund, "The success in establishing the No. 1 Equity Investment Fund represents an important achievement of China Merchants Group in the interactive development of finance and industry, a practical implementation of the Strategic Cooperation Framework Agreement in Ganzhou which was signed between Ganzhou Municipal People's Government and CMS on December 2012, and a significant measure taken by CMS to realize the goal of 'comprehensively enhancing the core competitiveness and building the best investment bank in China'."

    

 

In 2012, CMS formulated a mid- and long-term development strategy targeting "comprehensively enhancing the core competitiveness and building the best investment bank in China". According to this strategy, CMS shall strive to increase the scale of direct equity investment funds, energetically explore new models for the cooperation with all equity investment platforms within China Merchants Group's system, and realize a PE fund management scale of RMB 10 billion within three years. The establishment of No. 1 Fund is an important achievement of implementation of this strategy, and another new benchmark of CMS in the field of broker direct equity investment following the Xiangjiang Industry Fund established in cooperation with Hunan Provincial Government in 2011 and the first broker Mezzanine Fund established in cooperation with Gemdale Group in 2012.