Announcement on the Selection of Managers for Proposed Sub-Funds of Nanjing Sci-Tech Innovation Master Fund
To fully advance the development of Nanjing’s strategy of "strengthening the city through industries" and give full play to the role of venture capital in "investing in early-stage projects, small-sized enterprises, and hard technology", Nanjing has established a Sci-Tech Innovation Master Fund with a scale of RMB 4 billion. The Sci-Tech Innovation Master Fund is now publicly selecting managers for its proposed sub-funds from the society. The specific details are hereby announced as follows:
Fully implement the decision-making arrangements of the CPC Nanjing Municipal Committee and Nanjing Municipal Government for "strengthening the city through industries". By means of the master-sub fund model, guide and drive social capital and financial capital, optimize Nanjing’s sci-tech innovation and entrepreneurship ecosystem, and promote the rapid development of Nanjing’s sci-tech innovative enterprises. It will provide strong support for Nanjing to accelerate the construction of a core bearing area for an industrial sci-tech innovation center with global influence and a national pilot zone for sci-tech finance reform.
Adopt an investment model of "taking sub-funds as the main focus and direct investment as a supplement". Centering on Nanjing’s "2+6+6" innovative industrial clusters, focus on new fields and new tracks, adhere to the principle of "investing in early-stage projects, small-sized enterprises, and hard technology", and invest in sci-tech innovative enterprises, sci-tech achievement transformation projects, etc.
Sub-fund investments shall prioritize economic benefits while taking social benefits into account. The investment directions shall be consistent with those of the Sci-Tech Innovation Master Fund.
In principle, the limited partnership system shall be adopted.
Sub-funds shall be registered within Nanjing.
In principle, the duration shall not exceed 10 years, among which the investment period shall not exceed 4 years.
The scale of a sub-fund shall generally not exceed RMB 500 million.
The investment amount of a sub-fund in a single project shall not exceed 20% of the total paid-in capital of the sub-fund.
The capital contribution subscribed by the Sci-Tech Innovation Master Fund in a single sub-fund shall not exceed 30% of the subscribed scale of the sub-fund, and it shall not be the sole largest investor. The Master Fund shall make capital contributions in the same proportion as other social capital, based on the actual amount of social capital raised.
The capital contribution subscribed by the management institution shall not be less than 1% of the subscribed scale of the sub-fund.
The amount invested by a sub-fund in projects within Nanjing shall not be less than 1.2 times the actual capital contribution of the Master Fund.
An enterprise that continuously meets one of the following conditions during the fund’s duration may be recognized as a reinvestment project:
An enterprise registered within Nanjing;
An enterprise registered outside Nanjing that relocates its registration address to Nanjing;
An enterprise registered outside Nanjing that establishes a subsidiary or R&D/production base in Nanjing (with substantive business operations);
An enterprise registered outside Nanjing that is merged/acquired or held by an enterprise registered within Nanjing;
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 Nanjing or enterprises registered outside Nanjing that relocate their registration address to Nanjing (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 address to Nanjing as specified in Items 2 and 5, the calculation may be based on 1.2 times the investment amount in the introduced enterprise;
For the reinvestment amount under Item 3, the calculation shall be based on the higher of the total investment amount in the Nanjing-based project or the paid-in registered capital;
For other scenarios, the calculation shall be based on the investment amount.
Sub-funds shall complete the pre-investment compliance review procedure and submit compliance review materials to the Sci-Tech Innovation Master Fund before project investment. The specific materials include:
Compliance review form for the proposed investment project;
Due diligence report or investment proposal for the proposed investment project;
Decision-making documents of the Investment Decision-Making Committee (if any);
Other important business materials.
If the capital contribution ratio of the Sci-Tech Innovation Master Fund in a sub-fund reaches 20% or more, it shall appoint at least one member to the sub-fund’s investment decision-making body; if the contribution ratio is less than 20%, it shall appoint at least one observer.
The fund shall be custodied at a commercial bank established within the territory of China. The custodian bank shall be selected through public selection. The selection announcement and result announcement shall be released on the designated platform of the Sci-Tech Innovation Master Fund’s management institution.
The main responsibilities of the custodian bank are specified in Appendix 2.
The management institution of the Sci-Tech Innovation Master Fund shall organize an annual assessment and evaluation of sub-funds. The assessment results shall be linked to subsequent capital contributions, early exit, management fee payment, and subsequent selection of managers.
During operation, the fund shall not engage in the following businesses:
Engaging in guarantee, mortgage, entrusted loan, or similar businesses;
Investing in secondary market stocks (except participating in private placements or 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 or 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 non-compliant with national industrial policies;
Other businesses prohibited by laws and regulations.
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 fields, investment strategies, or investment regions.
The hurdle rate of return of the sub-fund shall be determined in accordance with market-oriented principles, and the performance fee of the sub-fund management institution shall not exceed 20% of the excess return.
(I) Be a company or partnership legally established in the Chinese mainland, with paid-in monetary capital of not less than RMB 10 million, which shall be commensurate with the scale of the fund it manages;
(II) Be registered as a private fund manager with the Asset Management Association of China (AMAC);
(III) Have sound equity investment management and risk control processes, and standardized project selection and investment decision-making systems;
(IV) Possess sound fund-raising capabilities and investment performance. In principle, the scale of private equity and venture capital funds managed by the manager 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 that have exited through IPO, M&A, transfer, or other means and achieved capital preservation and appreciation; or the IRR of the funds under its management shall reach 20%; or the manager shall have led investments in 3 listed companies or unicorns;
(V) The management team shall have at least 5 full-time senior managers with more than 3 years of experience in equity investment or fund management, and with good management performance and professional ethics;
(VI) Have project reserves matching the fund’s investment fields and directions;
(VII) Have fund-raising capabilities commensurate with the fund’s scale;
(VIII) The fund manager, its directors, supervisors, senior managers, and other employees shall have no major illegal or irregular acts in the past 3 years;
(IX) Other conditions stipulated by laws, regulations, and the Asset Management Association of China (AMAC).
Publicly release the selection announcement and application guidelines.
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.
The management institution of the Sci-Tech Innovation Master Fund shall conduct due diligence on the sub-fund applicant, management institution (or the plan for the proposed institution), and investment team independently or by entrusting a third party, prepare a due diligence report, and put forward investment suggestions.
The management institution of the Sci-Tech Innovation Master Fund shall determine the selection result after completing the decision-making process.
The selection result shall be publicly announced to the society for no less than 5 working days.
Applicant institutions may inquire about this fund selection announcement on the official website and WeChat official 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 Appendix for material templates). The content of electronic materials and paper materials must be consistent. The applicant shall bear full responsibility for the legality, authenticity, validity, and consistency of the application materials. Once submitted, the application materials will not be returned.
Electronic materials shall be submitted to: selection@njicg.com
Paper materials (with company seal and page-by-page seal) shall be mailed to: Fund Management Department, Nanjing Innovation Investment Group, 41st Floor, Building 4, Financial City, No. 248 Lushan Road, Jianye District, Nanjing
Contact phone: 025-86596544
Ms. Wang: 025-86596527
(I) 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; in serious cases, legal responsibilities shall be pursued in accordance with the law.
(II) This announcement is merely an invitation to offer and does not constitute a legal contract. The fund management institution shall be determined through the above-mentioned 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.
(III) The selected sub-fund management institution shall complete the fund establishment within 12 months.
(IV) The Sci-Tech Innovation Master Fund reserves the final right of interpretation regarding matters related to this selection.
Hereby announced.
Nanjing Sci-Tech Innovation Master Fund
October 18, 2024
Source: Venture Capital Group
Review: Xue Yao
Release: You Yi
