Origo Partners has signed a memorandum of understanding with the Xinxiang Municipal Government on the formation of the Origo China Sustainable Development Fund, a RMB-denominated private equity fund.
The fund will have an initial targeted capital commitment of USD75m equivalent, of which USD18m will be an anchor investment by the Xinxiang Municipal Government.
The fund will target investments in fast growing privately held companies across China in the clean tech and sustainable development sectors, including renewable energy, electric vehicles, waste recycling, energy storage and distribution, sustainable agriculture and water related technologies.
It is expected that the fund will capitalise on a number of macro trends in the Chinese economy which have prompted significant government support and funding, designed to address dependency on foreign energy sources, declining fresh water resources, contaminated food supply and growing environmental pollution.
The fund will be registered in Xinxiang, a city of about six million people located in Henan province, one of China’s most populous provinces with close to 100 million people. With more than 200 registered battery manufacturers alone, Xinxiang city is particularly known for its electric vehicle, energy storage and automotive industries.
The first closing for the fund is expected during 2010.
Chris Rynning (pictured right), chief executive of Origo, says: “The launch of our first RMB fund will be the start of a new series of funds for Origo in the domestic Chinese market. We are delighted to be able to work with the Chinese government in accessing the best and fastest growing Chinese clean technology companies. We believe the fund will enable Origo to exit investments in the domestic stock markets which enjoy both excellent liquidity and premium valuations.”