July 28, HBIS and China Great Wall Asset Management Co.Ltd (GWAM)jointly launched the “Great Wall & HBIS Industrial Development Fund”（the Fund）in Beijing. The fund will be dedicated to assist the reform and upgrade of Chinese steel industry. HBIS Chairman Yu Yong, GWAM chairman Shen Xiaoming jointly unveiled the plaque for the fund.
The parent fund will be worth of 10billion RMB. As a SOE capital fund, it is expected to attract more capital from the financing community and expand its capabilities. Its target is to financing services to projects worth of 30-50 billion RMB, especially HBIS reform and strategic projects and lead the reform of Hebei economy. HBIS and GWAM are twin limited partners of the fund. HBIS Investment & Holding Co.Ltd and Great Wall (Tianjin) Equity Investment Fund Management Co.Ltd are twin General Partners of the fund. HBIS and GWAM each controls 51% and 49% of the fund. HBIS Investment & Holding will be the manager and executive partner to manage the investment and management. The Fund will be focused on HBIS projects by M&A of upper and down stream industry to improve the efficiency of the full industrial chain and its international competitiveness. It will support HBIS to develop environmental protection, new material, new energy, resources, logistic, Internet+, supply chain financing projects and help the group to upgrade itself from a follower to a leading player in industries and new businesses. The fund will offer strong supports to IPO efforts of Hebei SOE, private placement,merger,upgrade of traditional industry and investment to new strategic industries. With financing supports, the fund will assist the merger of industrial resources and reform the industrial structure of Hebei Province.
In the ceremony, Yu Yong delivered his ardent speech and said GWAM was one four major asset management firms in the country, which had played a major role in de-risking finance sector, improving asset value. The incorporation of the fund is a new achievement to jointly develop the real economy and financing economy and will be able to lead and improve the upgrade of the industry and reform the structure. It will help HBIS to develop new industrial edge and receive supports from social capital. The joint venture between a real economy and finance will push the steel industry to a new stage.
Shen Xiaoming said in his speech, The Fund will be the iconic project of GWAM to assist the development of real economy with financing capability and pursue the supply side reform of the economy. The fund will further strengthen the cooperation between central government owned enterprises and lead provincial SOE. They are complementary with their won resources and will explore a strong-strong cooperation mechanism with controllable risks and foreseeable profit level. It is a sound starting point a central government owned financing enterprise supporting the supply side reform and a profound opportunity for Hebei economic development.
The fund will completed its incorporation procedures in early July and received its business licenses. The fund adopts a mechanism of Leading of SOE capital, Participation of Social capital, professional execution and expert decision making policies. An Investment Decision Committee, which members are nominated by partners will be established to make all investment decisions by voting, all following strict procedural requirements. According to different circumstances, the fund will establish more subsequent industrial funds to provide capital to industrial reform, optimization of debt, overseas M&A and asset management funds. Since the parties raised the proposal of JV last year,the project teams have studied multiple projects including HBIS Xuangong, HBIS Cloud Commerce, Chengde Titanium & Vanadium. Meanwhile, many potential projects are under review. Since then，GWAM has invested 500million RMB to oversea M&A deal between HBIS Xuangong and South African PMC.