Announcement on the Selection of Managers for Proposed Sub-funds of Nanjing Lishui Industrial Development Fund

To actively promote the industrial development of Lishui District, Nanjing, Nanjing Lishui District has established the Nanjing Lishui Industrial Development Fund (hereinafter referred to as the "Lishui Fund") with a scale of RMB 3 billion. Jointly initiated by state-owned enterprises in Lishui District and Nanjing Zijing Venture Capital Fund Management Co., Ltd., the Lishui Fund serves as a key capital force for Lishui District to drive industrial upgrading. It clearly focuses on the core tracks of "Two New and Two Intelligent Sectors" and aims to leverage capital empowerment to unblock key links in industrial development. The Lishui Fund is now publicly selecting proposed sub-fund management institutions from the society. The specific details are announced as follows:

I. Overview

(I) Fund Positioning

The Nanjing Lishui Industrial Development Fund is established to fully implement the decisions and arrangements of the CPC Lishui District Committee and Lishui District Government on strengthening the district through industries, further exert the leading and leveraging role of district-owned state-owned enterprises, better promote the construction of "strengthening the district through industries" in Lishui District, and focus on advancing the development strategy of industrial empowerment for the district.

(II) Investment Directions

Investment directions are mainly divided into three categories: scientific and technological innovation talents, "Two New and Two Intelligent Sectors" (new pharmaceuticals and life and health, new energy, intelligent equipment manufacturing, smart agriculture), and modern agriculture.

II. Requirements for Proposed Sub-funds

(I) Fund Investment Orientation

The fund’s investment shall prioritize economic benefits while taking into account social benefits and its role in strengthening, extending, and supplementing the chains of the district’s leading industries. The investment direction shall fall within the scope of the Lishui Fund’s investment directions.

(II) Establishment Form

In principle, the limited partnership system shall be adopted.

(III) Fund Registration Location

Sub-funds are encouraged to be registered within Lishui District, Nanjing.

(IV) Term of Existence

In principle, the term of existence shall not exceed 10 years, among which the investment period shall generally not exceed 4 years.

(V) Investment Ratio

The investment amount of a sub-fund in a single project shall not exceed 20% of the total paid-in capital of the fund.

(VI) Committed Capital Contribution

The committed capital contribution of the Lishui Fund shall not exceed 30% of the committed scale of the sub-fund; the Lishui Fund shall make capital contributions in the same proportion as other social capital, based on the actual collection of social capital.

The committed capital contribution of the management institution shall not be less than 1% of the committed scale of the sub-fund.

(VII) Reinvestment Requirements

For a sub-fund registered within Lishui District, Nanjing, the amount invested in projects within Lishui District shall not be less than 1.2 times the actual capital contribution of the Lishui Fund.

For a sub-fund registered outside Lishui District, Nanjing, the amount invested in projects within Lishui District shall not be less than 1.5 times the actual capital contribution of the Lishui Fund.

An enterprise may be recognized as a reinvestment project if it continuously meets one of the following conditions during the fund’s term of existence:

Enterprises registered within Lishui District;

Enterprises outside Nanjing that relocate their registration to Lishui District;

Enterprises outside Lishui District that invest in establishing subsidiaries or R&D and production bases within Lishui District (with substantive business operations);

Enterprises outside Lishui District that are merged or held by enterprises registered within Lishui District;

After the establishment of the sub-fund, other funds managed by the sub-fund manager during the same period or other funds managed by entities under the same actual control as the sub-fund manager invest in enterprises registered within Lishui District or enterprises outside Lishui District that relocate their registration to Lishui District. (This reinvestment scenario shall be calculated only once and shall not be repeatedly calculated across multiple funds.)

Among the above:

For scenarios involving relocation of registration to Lishui District as specified in Items 2 and 5, the amount may be calculated as 1.2 times the investment amount in the introduced enterprise;

For the reinvestment amount under Item 3, it shall be calculated based on the higher of the total investment in projects within Lishui District or the paid-in registered capital;

For other scenarios, the amount shall be calculated based on the actual investment amount.

(VIII) Compliance Review

The sub-fund shall conduct a pre-compliance review process before project investment and submit compliance review materials to the Lishui Fund. The specific materials include:

Compliance review form for the proposed investment project;

Due diligence report or investment proposal for the proposed investment project;

Decision documents of the Investment Decision-Making Committee (if applicable);

Other important business materials.

(IX) Investment Decision-Making

If the Lishui Fund’s capital contribution ratio in the sub-fund reaches 20% or more, it shall appoint at least 1 member to the sub-fund’s Investment Decision-Making Committee;

If the capital contribution ratio is less than 20%, it shall appoint at least 1 observer.

(X) Custodian Bank

The fund shall be custodied at a commercial bank established within the People’s Republic of China. The custodian bank shall be selected through public selection. The announcement of the selection and the public notice of results shall be published on the designated platform of the Lishui Fund’s management institution.

The main responsibilities of the custodian bank are detailed in Appendix 2.

(XI) Performance Evaluation

The Lishui Fund’s management institution shall organize an annual assessment and evaluation of the sub-fund. The assessment results shall be linked to subsequent capital contributions, early exit, management fee payment, and subsequent selection of managers.

(XII) Negative List

During its operation, the fund shall not engage in the following businesses:

Engaging in guarantees, mortgages, entrusted loans, and other similar businesses;

Investing in secondary market stocks (except for participating in private placements and agreement transfers of listed companies), futures, real estate, securities investment funds, corporate bonds, trust products, wealth management products, insurance plans, and other financial derivatives;

Providing sponsorships or donations to any third party;

Absorbing deposits (or disguised deposits) or providing loans and fund lending to third parties;

Making external investments that bear unlimited joint and several liabilities;

Illegally raising funds by issuing trusts or collective wealth management products;

Conducting business in the form of "equity in name but debt in nature" or "fund in name but deposit in nature";

Investing in projects prohibited, restricted, or non-compliant with national industrial policies;

Other businesses prohibited by laws and regulations.

(XIII) Non-Compete Obligation

Before the sub-fund completes 70% of its investment progress, the sub-fund manager and its related parties shall not raise or manage other funds with substantially the same investment areas, investment strategies, or investment regions.

(XIV) Profit Distribution

The hurdle rate of return of the sub-fund shall be determined in accordance with market-oriented principles.

III. Requirements for Management Institutions

Being a company or partnership legally established in the Chinese mainland, with paid-in monetary capital of not less than RMB 10 million, which is compatible with the scale of the fund it manages;

Having been registered as a private fund manager with the Asset Management Association of China (AMAC);

Having sound equity investment management and risk control processes, as well as standardized project selection and investment decision-making systems;

Possessing good fund-raising capabilities and investment performance:

In principle, the scale of private equity and venture capital funds managed by the manager in the relevant industrial field, or the total investment amount in projects of the industrial field, shall not be less than twice the scale of the proposed sub-fund to be applied for;

The manager shall have at least 10 direct-investment enterprises in the industrial field that have exited through IPO, M&A, transfer, etc., with capital preservation and appreciation achieved; or the overall IRR of the manager’s investment projects in the industrial field shall reach 20%; or the manager shall have led investments in 3 listed companies or unicorn enterprises in the industrial field.

(To actively attract central enterprises, industrial leaders, and large financial institutions for cooperation: if a management institution wholly-owned, controlled, and actually controlled by a central enterprise, industrial leader, or large financial institution participates in the selection, and the central enterprise, industrial leader, or large financial institution contributes not less than 25% of the sub-fund in this industrial field, the key consideration shall be the capital and industrial resources that can be introduced to Nanjing, and the above requirements may be appropriately relaxed.)

Having a management team with at least 5 full-time senior managers who have more than 3 years of experience in equity investment or fund management, and possess good management performance and professional ethics;

Having project reserves matching the fund’s investment fields and directions;

Having fund-raising capabilities compatible with the fund’s scale;

The fund manager, its directors, supervisors, senior managers, and other employees shall have no major illegal or irregular acts in the past 3 years;

Other conditions stipulated by laws, regulations, and the Asset Management Association of China.

IV. Selection Process

Announcement Release: Publicly release the selection announcement and application guidelines;

Preliminary Review of Materials: Conduct a preliminary review of the completeness, comprehensiveness, and feasibility of the application materials, exclude application plans that do not meet basic requirements, and determine the list of shortlisted institutions;

Due Diligence: The Lishui Fund’s management institution shall conduct due diligence on the sub-fund applicant, management institution (or the plan of the proposed institution), and investment team independently or by entrusting a third party, prepare a due diligence report, and put forward investment recommendations;

Investment Decision-Making: The Lishui Fund’s management institution shall determine the selection results after completing the decision-making process;

Result Public Notice: Publicly announce the selection results to the society for no less than 5 working days.

V. Application Method

Applicant institutions may inquire about this fund selection announcement on the official website and official WeChat account of Nanjing Innovation Investment Group, and self-evaluate whether they meet the basic application requirements;

Institutions that self-evaluate as meeting the basic application requirements and intend to apply shall submit both electronic materials and two copies of paper materials (see appendices for material templates). The content of electronic materials and paper materials must be consistent;

Applicants shall bear full responsibility for the legality, authenticity, validity, and consistency of the application materials. Once submitted, the application materials will not be returned;

Submission of Electronic Materials: Send to selection@njicg.com;

Submission of Paper Materials: Mail to the Fund Management Department of Nanjing Innovation Investment Group, 41st Floor, Building 4, Financial City, No. 248 Lushan Road, Jianye District, Nanjing (with the official seal of the company and page-sealing seal affixed);

Contact Phone: 025-86596547.

VI. Contact Person and Phone Number

Ms. Tong: 025-86596547

VII. Other Matters

The sub-fund management institution shall commit to bearing full responsibility for the legality, authenticity, validity, and consistency of the application materials. Those providing false materials shall have their application qualifications revoked, and those involved in serious cases shall be held legally responsible;

This announcement is merely an invitation to treat and does not constitute a legal contract. The fund management institution shall be determined through the above procedures based on merit. Unsuccessful applicants will not be notified separately. The fund partnership agreement shall be negotiated and formulated by all parties subsequently without violating the relevant requirements of this announcement;

The selected sub-fund management institution shall complete the fund establishment within 12 months;

The Lishui Fund reserves the final right of interpretation regarding matters related to the selection.

Hereby Announced.

Nanjing Lishui Industrial Development Fund

November 10, 2025

Source: Venture Capital Group

Reviewer: Xue Yao

Publisher: You Yi