Blackstone to Form the First Renminbi Denominated Regional Private Equity Fund in Shanghai

The newly formed Government of Pudong New Area signed the first important memorandum of understanding in the financial services sector on the 14th of August during a signing ceremony, with the world renowned alternative investment company, The Blackstone Group. The Blackstone Group will establish its first regional Renminbi denominated private equity fund in the Shanghai Pudong New Area – the Blackstone Zhonghua Development Investment Fund. Blackstone Zhonghua Development Investment Fund will raise approximately RMB5 billion. The fund will give priority to investments in Shanghai and neighbouring areas.

Mr. Lin Xu, Standing Member of the Shanghai Party Committee and Party Secretary of Pudong New Area, commented: “The Blackstone Group is the largest publicly listed alternative asset management company in the world, possessing extensive investment management expertise and world class risk control capabilities. The selection of Pudong New Area as its partner in the establishment of the Blackstone Zhonghua Development Investment Fund clearly demonstrates Blackstone and its Greater China team’s support and confidence in the future development of Pudong. In addition, Blackstone’s presence will both contribute to Pudong’s effort in developing an international finance centre and shipping centre in Shanghai and play a significant role, as a financial service provider, in encouraging economic transformation in and upgrading industrial capabilities of Pudong.”

Mr. Liang Jiang, Deputy Secretary General of the Shanghai City Party Committee, Deputy Party Secretary and Governor of Pudong New Area and Mr. Antony Leung, Senior Managing Director and Blackstone’s Chairman for Greater China, jointly signed the memorandum of understanding.

Mr. Antony Leung said that the Blackstone Zhonghua Development Investment Fund is Blackstone’s first regional Renminbi denominated private equity fund and is thus a groundbreaking development for Blackstone, reflecting the emphasis placed by Blackstone on the Chinese market.  Back in November 2008, Mr. Leung already clearly indicated that, despite the global financial crisis, the rapid growth of the Chinese economy and favourable returns from Chinese enterprises mean that Blackstone’s investments in China would not decelerate.

Since the State Council published its opinion in April 2009 on the promotion of the twin-track plan to develop Shanghai into an international finance centre and a shipping centre and Shanghai convened a meeting on implementing the opinion, Pudong has acted swiftly and published the ”Implementation Opinion on the Facilitation of the Development of the Pudong New Area as the Hub of Shanghai as an International Finance Centre”, which clearly stated Pudong’s plans and objectives. As the hub of Shanghai’s financial activities, Pudong places great emphasis on the financing capabilities of equity investment enterprises, and has introduced, over the last six months, support and incentive policies to domestic equity investment enterprises and foreign equity investment management enterprises to encourage the establishment of such entities in Pudong. The expanded territory of Pudong will provide a greater platform for equity investments.  Sources close to the project suggested that the investment by Blackstone will serve as a good example for other financial institutions and equity investment enterprises intending to invest in Pudong.

Deputy Governor of Pudong New Area Xu Yan chaired the signing ceremony.

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Phoebe Chi
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