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TEDA leads development of pivate equity

Updated: 2010-06-17 14:15

TEDA, a core part of Tianjin Binhai New Area (TBNA), wins its fame for not only being a manufacturing powerhouse, but also a key fund hub of Tianjin.

When speaking about TBNA’s financial reform and innovation, one cannot ignore the contribution and status of TEDA as a fund registration and service center. The development of private equity (PE) funds in TEDA stands out as one key aspect of TBNA’s financial reform.

Looking through the development of PE investment across China, Tianjin has been occupying the leading position, with TBNA taking the lead position in Tianjin and TEDA the lead position in TBNA at the present stage.

TEDA has gained top place across the country in terms of the number of equity investment enterprises receiving approval for the record from the NDRC and the number of equity investment enterprises. TEDA now occupies the leading position in China in providing services for and managing PE investment development enterprises, whether in terms of laws, policy enforcement environment or other related services, which includes commercial and tax registration as well as banking services. TEDA is expected to continue leading the country’s PE investment development in future.

As of April of 2010, TEDA has about 236 PE managing firms and PE fund companies registered in its territory, among which domestic PE funds management enterprises and PE funds amounting to 202, with funds being 114 and fund management firms 88. The registered fund investment totaled at 51.152 billion yuan, with actual capital in place reaching 12.636 billion yuan. The number of PE funds registered in TEDA account for 60 percent of that in Tianjin Municipality.

As a core part of TBNA, TEDA outperforms its national peers in terms of supporting PE fund development and offering services concerning PE fund registration, management, taxation and other auxiliary services, such as banking.

Since the newly revised law of partnership established the parameters of the limited partnership form in 2007, the development of PE funds has been protected by law.

Nationwide, TEDA was the first to complete its commercial registration of Tianjin’s first equity investment fund enterprise invested by people in 2007. Then, the Tianjin Administration for Industry and Commerce issued measures for the commercial registration management of private equity fund enterprises and private equity investment fund management companies (enterprises). Tianjin Local Taxation Bureau made timely and clear replies on the tax registration and taxation service policies for partners of PE investment fund enterprises and PE investment fund management limited companies (enterprises). The successful implementation and high-quality services provided by TEDA’s commerce and tax registrant authorities allowed the rapid development of regional PE funds (fund management enterprises).

In December, 2009, the National Development and Reform Commission (NDRC) of China approved applications from 13 venture (equity) investment management enterprises including Qianxin Culture & Investment Management. This is the third batch of enterprises receiving approval from the NDRC following CDH Investments (Tianjin) and Hony Capital (Tianjin) which both got approved in June 2008 with seven other venture (equity) investment management enterprises, including CCB Healthcare Investment Management (Tianjin), which was approved in April 2009.

There were a total of 22 enterprises who were approved including 16 equity investment fund management enterprises NDRC implemented by NDRC and tried beforehand in TBNA, with 13 based in the TEDA and three others based in other areas within TBNA. There are remaining 6 venture investment management enterprises, with which, the State Council of China supported Beijing Zhongguancun Science and Technology Zone to establish national independent innovation zones.

Among the funds managed by the 13 fund management enterprises, which received approval from the NDRC, 10 funds began to invest capital industries such as healthcare, energy, property, M&A and reorganization of state-owned enterprises, equipment leasing and culture and media; 2 funds received an amount of investment of 2 billion yuan from the National Social Security Fund of China, respectively; 3 funds invested Tianjin projects; 7 investors funds were from large and medium-sized institutions; 3 funds began their tax payments.

By Rong Xiaozheng