Announcement on the Selection of Managers for Sub-Funds of Nanjing Talent Development Fund (Phase I)
Nanjing Talent Development Fund (Phase I) (hereinafter referred to as the "Master Fund" or "Talent Master Fund") is jointly initiated by Southeast Group, Venture Capital Group and relevant districts, and managed by Nanjing Southeast Investment Fund Management Co., Ltd. (hereinafter referred to as the "Master Fund Manager"). The Talent Master Fund has a target scale of RMB 2 billion, with a Phase I scale of RMB 200 million. Centering on Nanjing’s efforts to expand the "2+6+6" innovative industrial clusters and their upstream and downstream industries, it adheres to the principle of "investing in early-stage projects, small-sized projects, talent-related projects, and hard technology", adopts an investment model of "taking sub-funds as the main focus and direct investment as a supplement", and mainly invests in sci-tech innovative enterprises, sci-tech achievement transformation projects, talent entrepreneurship projects, and university entrepreneurship projects in Nanjing.
Sub-funds shall be registered in Nanjing, complete registration and filing procedures with competent authorities and industry organizations in accordance with relevant national regulations, and accept supervision.
The scale of a sub-fund shall generally not exceed RMB 200 million. The capital contribution subscribed by the Talent Master Fund in a single sub-fund shall not exceed 50% of the subscribed scale of the sub-fund, and the capital contribution ratio of the sub-fund manager (as a general partner) shall not be less than 1%.
When submitting the fund application plan, the sub-fund manager must have raised at least 40% of the total planned scale of the proposed sub-fund (excluding the capital contribution from the Talent Master Fund), and provide materials such as capital contribution commitment letters and proof of capital contribution capacity from the proposed investors (excluding government-guided funds directly funded by people’s governments at all levels or their functional departments, but equivalent supporting documents shall be provided).
The Talent Sub-funds shall adopt phased paid-in capital contribution. The next phase of capital contribution shall be paid in a timely manner based on the investment progress of the previously paid-in capital. The capital contribution of the Talent Master Fund shall be made in the same proportion as other social capital, based on the actual amount of social capital raised. The capital contribution of the Talent Master Fund shall be transferred by the Master Fund Manager to the sub-fund account in the same proportion in accordance with procedures, after the current phase of capital contribution from other investors is actually in place.
In principle, the duration of a sub-fund shall not exceed 10 years, among which the investment period shall not exceed 4 years. If the invested projects of a sub-fund are in the process of listing or within the post-listing lock-up period, the above-mentioned duration limit may not apply.
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.
Centering on Nanjing’s efforts to expand the "2+6+6" innovative industrial clusters and their upstream and downstream industries, the Talent Sub-funds shall focus on key industries, key fields, and key projects specified in the strategy of "strengthening the city through industries", give priority to layout in tracks such as biomedicine, integrated circuits, and artificial intelligence, and mainly invest in sci-tech innovative enterprises, sci-tech achievement transformation projects, talent entrepreneurship projects, and university entrepreneurship projects in Nanjing. At the same time, sub-funds shall actively introduce projects from other regions that are in line with the industries supported and encouraged by Nanjing to settle in the city, promptly provide information such as project sources, and offer necessary connection and assistance support.
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.
A fund shall establish an investment decision-making body, generally composed of 3 or more members, which shall be specifically responsible for making decisions on investment, major post-investment matters, exit, etc. Projects involving related-party transactions, overseas investments, abnormal valuations, or complex transaction structures shall be subject to strict review and prudent decision-making.
If the capital contribution ratio of the Talent 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.
Sub-funds 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.
In principle, the hurdle rate of return of a sub-fund shall not be less than 5%, and the performance fee of the sub-fund management institution shall not exceed 20% of the excess return.
If the performance of a sub-fund fails to meet expected results, the investment progress is slow, or funds are idle for a long time, the Talent Master Fund shall exit at an appropriate time in accordance with the provisions of the fund agreement (articles of association).
The Talent Master Fund may choose to exit in advance without the consent of other investors under any of the following circumstances:
More than 1 year has passed since the fund plan was approved, but the establishment procedures have not been completed in accordance with the prescribed procedures and time requirements;
More than 1 year has passed since the Talent Master Fund transferred funds to the sub-fund account, but the fund has not carried out any investment business;
The investment fields and directions of the fund do not conform to the policy objectives;
The intentional or grossly negligent acts of the fund manager or other investors may seriously damage the interests of the Talent Master Fund’s capital contribution;
Other circumstances that do not comply with the provisions of the fund agreement (articles of association).
When the Talent Master Fund exits in advance in accordance with the provisions of this article, the sub-fund manager and relevant investors shall cooperate.
The management fees of sub-funds shall be set in accordance with market-oriented principles. In principle, during the investment period, the annual management fee shall not exceed 2% of the paid-in scale of the fund; during the management and exit period, it shall not exceed 2% of the unexited investment cost per year; no management fees shall be charged during the extension period or liquidation period. The accrual of management fees for the capital contribution portion of the Talent Master Fund shall be linked to the results of the fund performance evaluation, and the specific amount of management fees shall be determined based on the performance evaluation results.
Sub-funds shall complete the pre-investment compliance review procedure and submit compliance review materials to the Talent Master Fund Manager.
The Talent Master Fund Manager shall organize the performance evaluation of sub-funds annually, and the performance management results shall be linked to subsequent capital contributions, early exit, management fee payment, and subsequent selection of managers.
The fund-raising, investment, post-investment management, liquidation, and exit of sub-funds shall be operated in accordance with market-oriented principles, and shall comply with the relevant policies and systems at the Nanjing municipal level and the Talent Master Fund level, including but not limited to requirements in fund operation, management fee management, investment decision-making, compliance review, reinvestment confirmation, non-compete restrictions, fund management, fund custody, information disclosure, fund exit, performance evaluation, and supervision and inspection.
(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 a professional and stable team. 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.
(IV) The fund manager, its directors, supervisors, senior managers, and other employees shall have no major illegal or irregular acts in the past 3 years.
(V) The core team of the sub-fund manager shall have a complete structure and sufficient coordination, and be equipped with an exclusive and stable management team. The sub-fund manager shall ensure the stability of core members; the fund agreement shall lock in the core personnel of the management team, and any change of the locked personnel shall be approved by the fund’s relevant authority such as the fund partners’ meeting through voting.
(VI) Possess good capabilities in early-stage project discovery, fund-raising, and exit performance. The sub-fund manager shall have project reserves matching the fund’s investment fields and directions, and fund-raising capabilities commensurate with the fund’s scale. In principle, the scale of private equity and venture capital funds managed by the sub-fund manager shall not be less than RMB 300 million, and at least 5 of the fund’s direct-investment projects shall have exited through IPO, M&A, transfer, or other means and achieved capital preservation and appreciation. The core team shall have profound comprehensive service capabilities and resources, and be able to provide good post-investment value-added services for invested enterprises.
(VII) Have a sound corporate governance and internal control management system, as well as sound equity investment management and risk control processes, and standardized project selection and investment decision-making systems.
Sub-fund managers shall meet the above requirements and other conditions stipulated by laws, regulations, and the Asset Management Association of China (AMAC).
The Talent Master Fund Manager shall release the sub-fund application guidelines and selection announcement to the public.
The Talent Master Fund Manager shall 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 after project approval.
The Talent Master Fund Manager 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 Talent Master Fund Manager shall submit relevant materials such as the sub-fund establishment plan, investment suggestions, and due diligence report to the investment decision-making body of the Talent Master Fund for decision-making.
The Talent Master Fund Manager shall announce the selection results within 10 days after the decision-making body of the Talent Master Fund completes the decision-making procedure, with a public announcement period of 5 working days.
Applicant institutions shall carry out the application for the Talent Master Fund in accordance with the requirements of this announcement, and shall submit both electronic and paper materials for this application. 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.
Application materials shall be compiled into a unified booklet in accordance with the requirements of the appendix, with five copies in total, and submitted to Nanjing Southeast Investment Fund Management Co., Ltd. (Address: 28th Floor, Phase II of Xindi Center, No. 168 Lushan Road, Jianye District, Nanjing; Recipient: Jiang Fan; Tel: 025-68110997). The scanned copy of the bound application materials (printed and bound in A4 size, with company seal and page-by-page seal) and the Word electronic version shall be sent to the email address njrcmjj@163.com simultaneously.
This selection announcement and application guidelines are only for the application and selection of sub-fund management institutions. The content involved shall not be deemed as an offer or commitment to any relevant party, nor shall it be used for the public promotion or roadshow of the applicant institution. The rights and obligations of the sub-fund management institution shall be subject to the finally signed partnership agreement.
Source: Southeast Fund Company
Review: Xue Yao
Release: You Yi
