To implement the deployment requirements of the CPC Jiangsu Provincial Committee and Jiangsu Provincial People's Government, give play to the role of long-term capital, patient capital, and strategic capital, promote the development of strategic emerging industries in Jiangsu Province, and strive to build an important position for developing new-quality productive forces, the Jiangsu Provincial Strategic Emerging Industry Master Fund (hereinafter referred to as the "Provincial Master Fund") and Nanjing Municipality have jointly funded the establishment of Jiangsu Nanjing Advanced Manufacturing Industry Special Master Fund (Limited Partnership) (hereinafter referred to as the "Industry-specific Master Fund") with a scale of RMB 5 billion. We are now publicly selecting management institutions for the industrial sub-funds, and the relevant matters are announced as follows:

I. Basic Principles of Selection

(I) Principle of Fairness, Impartiality and Openness

Review and evaluation shall be conducted in accordance with unified selection rules, selection criteria and scoring standards to ensure equal opportunities for all applicant management institutions under the same conditions.

(II) Principle of Compliance with Laws and Regulations

The selection work shall strictly implement national laws and regulations, industry supervision requirements and relevant policies, and be carried out in accordance with laws and regulations for the selection of fund management institutions.

(III) Principle of Abiding by Market Rules

Abide by market rules, expand selection channels, and select high-quality fund management institutions that match the fund's investment direction, have excellent management qualifications, strong management capabilities and rich investment experience for cooperation.

II. Basic Information of the Industry-specific Master Fund

(I) Fund Positioning

It aims to support Nanjing in promoting the integrated development of strategic emerging industry clusters and optimizing the layout of the local modern industrial system.

(II) Organizational Form

Limited partnership system.

(III) Registration Address

Nanjing City, Jiangsu Province.

(IV) Duration

The total duration is 15 years, including an investment period of 8 years and an exit period of 7 years.

(V) Capital Contribution Structure

The total scale is RMB 5 billion, among which:

The Provincial Master Fund contributes RMB 1.25 billion, accounting for 25%;

Nanjing Zijin Industrial Investment Co., Ltd. contributes RMB 1.65 billion, accounting for 33%;

Nanjing Pukou District Science and Technology Innovation Investment Co., Ltd. contributes RMB 625 million, accounting for 12.5%;

Nanjing Pukou Development Zone High-Tech Investment Co., Ltd. contributes RMB 500 million, accounting for 10%;

Nanjing Kechuang Financial Management Co., Ltd. contributes RMB 125 million, accounting for 2.5%;

Nanjing Jiangbei New Area High-Quality Development Industrial Investment Fund (Limited Partnership) contributes RMB 800 million, accounting for 16%;

Nanjing Strategic Emerging Private Equity Fund Management Co., Ltd. (general partner) contributes RMB 50 million, accounting for 1%.

(VI) Investment Model

Investment methods include investing through the establishment of industrial sub-funds or direct investment in projects; the amount of direct investment in projects shall generally not exceed 30% of the actual investment amount of the Industry-specific Master Fund.

The subscribed contribution ratio of the Industry-specific Master Fund in an industrial sub-fund shall not exceed 30% of the scale of the industrial sub-fund; the investment amount in a single direct-investment project shall not exceed 20% of the total paid-in capital of the Industry-specific Master Fund.

(VII) Investment Directions

It mainly invests in the following fields:

Intelligent equipment industry (robots, industrial machine tools, construction machinery, rail transit equipment);

Low-altitude economy and aerospace industry (low-altitude industry, commercial aerospace, aircraft supporting facilities);

Integrated circuits (chip manufacturing, chip packaging, key materials and equipment);

New energy vehicles (new energy vehicles, power batteries, intelligent connected vehicles).

III. Requirements for the Establishment of Industrial Sub-funds

(I) Basic Requirements

The fund-raising, establishment and investment operation of the industrial sub-fund shall comply with the requirements of relevant laws, regulations and self-regulatory rules in the industry;

The industrial sub-fund shall complete product filing with the Asset Management Association of China (AMAC) in accordance with regulations and operate in accordance with laws and regulations;

The industrial sub-fund shall directly invest in targets that meet the investment direction and other relevant requirements of the Industry-specific Master Fund;

The industrial sub-fund shall be registered in Jiangsu Province;

The scale of the industrial sub-fund shall not be less than RMB 500 million (not less than RMB 1 billion in southern Jiangsu); the total capital contribution ratio of governments at all levels shall not exceed 50%;

Other requirements specified by laws, regulations and policies.

(II) Duration

In principle, the duration shall not exceed 10 years, including an investment period of no more than 4 years and the remaining period as the exit period.

(III) Investment Regions

The amount of direct investment in enterprises within Jiangsu Province shall not be less than the total capital contribution of governments at all levels, and its proportion in the total direct investment amount shall not be less than 70%. During the fund's duration, an enterprise that continuously meets the following circumstances may be recognized as an enterprise within Jiangsu Province:

(1) An enterprise directly registered in Jiangsu Province;

(2) An enterprise that relocates its registration address to Jiangsu Province after investment (the relocation occurs during the fund's duration);

(3) An enterprise that settles its main production and R&D bases in Jiangsu Province by establishing subsidiaries (with substantive business operations);

(4) An enterprise acquired by an enterprise registered in Jiangsu Province (controlling acquisition and included in the consolidated financial statements);

(5) Other enterprises that may be recognized as being within Jiangsu Province.

The amount of the industrial sub-fund invested in projects within Nanjing City shall not be less than 1.2 times the actual contribution of the Industry-specific Master Fund.

An enterprise that continuously meets one of the following circumstances during the fund's duration may be recognized as a reinvestment project:

(1) An enterprise registered in Nanjing City;

(2) An enterprise outside Nanjing City that relocates its registration address to Nanjing City;

(3) An enterprise outside Nanjing City that establishes subsidiaries or R&D and production bases in Nanjing City (with substantive business operations);

(4) An enterprise outside Nanjing City that is merged, acquired or controlled by an enterprise registered in Nanjing City;

(5) 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 in Nanjing City or enterprises outside Nanjing City that relocate their registration address to Nanjing City (this reinvestment circumstance shall be calculated only once and shall not be repeatedly calculated in multiple funds).

Among the above, for the circumstances involving relocation of registration address to Nanjing City as specified in Item 2 and Item 5, the amount may be calculated as 1.2 times the investment amount in the introduced enterprise; the reinvestment amount under Item 3 shall be calculated based on the higher of the total investment in projects within Nanjing City or the paid-in registered capital; the reinvestment amount under other circumstances shall be calculated based on the actual investment amount.

The amount of investment in enterprises within Jiangsu Province and Nanjing City shall be calculated separately in accordance with Article 1 and Article 2 above.

In principle, no investment shall be made in overseas projects. If it is really necessary to invest in overseas projects, the industrial sub-fund management institution shall conduct strict review and fully demonstrate the necessity and compliance of capital outflow and capital security guarantee measures.

(IV) Management Fees

Investment period: not exceeding 1.5% of the fund's paid-in scale per year;

Exit period: not exceeding 1.5% of the initial investment cost of unexited projects per year;

Extension period and liquidation period: no management fees shall be charged;

Establish a retrospective adjustment mechanism for management fees. At the end of the investment period, the uninvested funds of the fund shall be returned and handled as capital reduction, and the overcharged fund management fees shall be returned in a timely manner or offset against the fund management fees during the exit period.

(V) Hurdle Rate and Performance Fee

The hurdle rate of return shall not be less than 5% per annum, and the performance fee of the management institution shall not exceed 20% of the excess return.

(VI) Negative List

The industrial sub-fund shall not engage in the following businesses:

Engaging in guarantee, mortgage, entrusted loan and other businesses;

Investing in secondary market stocks, 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 with unlimited joint and several liability;

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

Conducting "equity in name but debt in reality" or "fund in name but deposit in reality" transactions;

Investing in projects prohibited, restricted or not in line with national industrial policies;

Using fund investment as a preferential condition for investment promotion;

Other businesses prohibited by national laws and regulations.

(VII) Management and Operation Requirements

The management and operation of the industrial sub-fund shall comply with the relevant requirements of the provincial government investment fund management system and the Provincial Master Fund management system, and shall implement the following management requirements:

The management institution of the Industry-specific Master Fund shall compile an investment field catalog under the guidance of Jiangsu Gaotou Strategic Emerging Private Equity Fund Management Co., Ltd. (hereinafter referred to as the "Provincial Master Fund Management Institution"), and the industrial sub-fund shall conduct investment in accordance with the investment field catalog;

The industrial sub-fund shall complete the pre-compliance review procedure before project investment and submit compliance review materials to the management institution of the Industry-specific Master Fund. All investment projects of the industrial sub-fund shall be reviewed by the Provincial Master Fund Management Institution to confirm compliance with the investment field catalog. The pre-compliance review shall focus on policy objectives, investment fields, project risks, etc.

The review materials specifically include:

(1) Compliance review form for the proposed investment project;

(2) Due diligence report and investment proposal for the proposed investment project;

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

(4) Other important business materials.

The management institution of the Industry-specific Master Fund shall appoint one member to the Investment Decision-Making Committee of the industrial sub-fund;

If the total investment amount of a proposed investment project of the industrial sub-fund reaches RMB 5 billion or more, the industrial sub-fund management institution shall report it as a major matter to the Provincial Master Fund Management Institution for pre-review. The pre-review shall focus on policy objectives, investment fields, project risks, etc. All investment projects of the industrial sub-fund shall be reviewed by the Provincial Master Fund Management Institution to confirm compliance with the investment field catalog;

The industrial sub-fund shall select a commercial bank with custody qualification as the custodian institution. The custodian institution shall be selected through public selection and take effect after being reviewed and approved by the partners' (shareholders') meeting of the industrial sub-fund; the custodian bank shall be one of the domestic systemically important banks (or their branches) recently identified by the People's Bank of China and the National Financial Regulatory Administration, and the custodian bank account of the industrial sub-fund must be directly connected to the Provincial Master Fund investment management system;

The industrial sub-fund management institution shall regularly update the fund's investment and operation status in the Provincial Master Fund investment management information system and the digital system of Nanjing Innovation Investment Group;

The management institution of the Industry-specific Master Fund shall conduct annual assessment and evaluation of the industrial sub-fund. The actual amount of management fees accrued by the industrial sub-fund each year shall be 80% of the amount that should be accrued in the current year. Among the remaining 20%, 10% of the amount that should be accrued in the current year shall be linked to the current year's assessment and evaluation results, and if the current year's assessment and evaluation grade is "poor", no accrual shall be made; the other 10% shall be accrued at one time when the fund is liquidated, and if the principal is not fully recovered when the fund is liquidated, no accrual shall be made. The specific implementation measures for assessment and evaluation shall be formulated separately by the management institution of the Industry-specific Master Fund;

The management institution of the Industry-specific Master Fund shall conduct annual supervision and inspection and special supervision and inspection on the industrial sub-fund, and the Provincial Master Fund Management Institution may conduct comprehensive review or random inspection.

IV. Application Requirements for Management Institutions and Management Teams

(I) Requirements for Management Institutions

The relevant standards for selecting management institutions shall not be lower than the following conditions:

Shall be registered with the Asset Management Association of China (AMAC);

In principle, shall be a leading institution in the private equity and venture capital industry (ranked among the top 50 early-stage investment institutions, venture capital institutions, private equity investment institutions or state-owned investment institutions in the authoritative institution rankings such as Zero2IPO, ChinaVenture and Rongzhong in the past three years), or a leading institution in a segmented industry (ranked among the top 50 in the segmented industry rankings of Zero2IPO, ChinaVenture and Rongzhong);

Registered in the Chinese mainland, with paid-in registered capital of not less than RMB 10 million and matching the scale of the fund it manages;

The capital contribution ratio to the industrial sub-fund (adopting limited partnership system) shall not be less than 1% of the fund's subscribed scale and not less than RMB 5 million;

Possess good fund-raising capabilities and exit performance. In principle, the scale of private equity and venture capital funds managed by the institution shall not be less than RMB 5 billion, and at least 10 of the enterprises directly invested by the fund have exited through IPO, M&A, equity transfer and other methods and achieved capital preservation and appreciation;

Have a professional and stable team. Among the full-time employees of the institution, at least 10 are specially engaged in investment business, among which at least 5 have more than 5 years of experience in equity investment fund management, and have good professional ethics and reputation. Have a fixed business site and software and hardware facilities matching its business;

Have a sound corporate governance and internal control management system. Have standardized project selection mechanisms, investment decision-making mechanisms, incentive and restraint mechanisms, risk control mechanisms, financial management mechanisms, etc.;

The management institution and its core management team members have no bad records of being punished by financial management departments or judicial organs, and no serious untrustworthy records.

After being determined as the sub-fund management institution through the selection process, the sub-fund management institution shall not arbitrarily change its equity, core management team or management personnel. If any adjustment is really necessary, it shall submit a written report to the management institution of the Industry-specific Master Fund for record within 5 working days from the date of making the adjustment decision. In case of major adverse adjustments, the management institution of the Industry-specific Master Fund has the right to reselect or change the management institution.

(II) Requirements for Management Teams

Equip with a full-time management team of not less than 5 people. Members shall have relevant professional qualification certificates, relevant field investment experience, and have worked in the applicant institution for no less than 3 years;

The core members of the full-time management team (the person in charge assigned to the industrial sub-fund and members of the investment committee) shall all have more than 5 years of equity investment management experience, and at least 2 of them have full-process management experience in "fund-raising, investment, management and exit" of fund products with the same nature as the Industry-specific Master Fund in the applicant institution. The above-mentioned fund products with the same nature as the Industry-specific Master Fund refer to equity investment funds with the same or similar investment directions;

The management institution shall ensure the stability of core members. The fund agreement shall lock in the members of the fund's Investment Decision-Making Committee and the core personnel of the management team. Any change of the locked personnel shall be approved by the fund's relevant authority such as the fund partners' (shareholders') meeting through voting;

The historical performance of core members shall be true and verifiable. Core members shall have served as key personnel, members of the investment committee or designated representatives in relevant funds, or served as senior managers responsible for investment business in the applicant institution and the managers of relevant funds;

Before the industrial sub-fund completes 70% of its investment progress, core members shall not raise or manage other funds with the same investment fields, investment regions and investment stages;

The management team shall establish a risk-interest binding mechanism in the industrial sub-fund.

V. Selection Process

The management institutions of the industrial sub-funds shall be publicly selected by the management institution of the Industry-specific Master Fund.

The selection process includes:

Release of announcement;

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 the basic requirements, and determine the list of shortlisted institutions;

Due diligence: conduct due diligence on the shortlisted institutions, focusing on the comprehensive verification of important information such as the management institution's registration and filing, historical business, organizational structure, professional operation, investment decision-making, post-investment management, risk control, finance, law and business;

Expert review: organize an expert review group to conduct a comprehensive review of the application materials of the management institutions, make comprehensive judgments and scores by listening to due diligence reports and on-site inquiries of the applicant institutions, and determine the list of candidate management institutions;

Decision-making process: the management institution of the Industry-specific Master Fund determines the selection result after completing the decision-making process;

Result announcement: the selection result shall be publicly announced to the society

VI. Application Method

Applicants shall carry out the application for industrial sub-fund management institutions in accordance with the requirements of this Announcement and prepare detailed application materials as specified in the appendix.

Application materials shall be compiled into a unified booklet. Specific requirements for stamping, formatting, cover design and binding are detailed in the appendix.

Submit three copies of the compiled application materials to Nanjing Innovation Investment Group (Address: Ms. Tian, Fund Management Department, 41st Floor, Building 4, Financial City, Jianye District, Nanjing). Meanwhile, send the scanned copy of the stamped compiled application materials and the Word electronic version to the email address: selection@njicg.com.

Contact Person: Tian Nannan

Contact Information: 025-86596559

Jiangsu Nanjing Advanced Manufacturing Industry Special Master Fund (Limited Partnership)

March 3, 2025

Source: Venture Capital Group
Review: Xue Yao
Release: You Yi