Chinese state-owned automaker SAIC Motor Corp is setting up a 4-billion-yuan ($574.2 million) fund in cooperation with a group of domestic companies to invest in the automobile ecosystem.
The fund, which is managed by SAIC Motor’s private equity (PE) investment platform Shang Qi Capital, held its first close at almost 3.4 billion yuan ($488.1 million), the Shanghai-listed company disclosed in a stock exchange filing on Friday.
As the biggest limited partner (LP) in the first close, SAIC Motor committed 980 million yuan ($140.7 million) to the vehicle through its wholly-owned financial service unit SAIC Finance, according to the filing.
Other key LPs include three local government-backed investment funds in central China’s Henan Province, as well as Jiangxi Province and Chongqing municipality in southeastern China. The fund also secured commitments from strategic LPs, such as the country’s auto services provider Donghua Automotive Industrial, and Huayu Automotive Body Components Technology, a manufacturer of auto body structure and exterior covering parts.
The new fund, whose Chinese name can be directly translated into “Henan Shang Qi Huirong Shangcheng No.1 Industry Investment Fund,” sources deals in automotive electronics, semiconductors, new energy, and other relevant industries, according to the filing.
It plans to pay special attention to investment opportunities in sectors such as autonomous driving, intelligent cockpit solutions, low-carbon transportation, auto chips, and information security products dedicated to vehicles.
The fund has a life span of seven years, including a three-year investment period and another four years for generating exits. Shang Qi Capital, as the general partner (GP), could apply to extend the investment period to up to five years and the exit period to up to six years, subject to the approvals of the investment committee.
SAIC Motor, which sold 5.3 million vehicles globally last year to remain China’s biggest auto group, has been an active investor behind some of the country’s rising auto tech startups.
The Shanghai-based auto group has built a portfolio of companies including the electric vehicle (EV) battery leader Contemporary Amperex Technology Co Ltd (CATL), ride-hailing service Xiangdao Chuxing, auto chip developers SemiDrive Technology and Horizon Robotics, as well as RT Advanced Materials, which produces lithium-ion battery materials.
In addition to Shang Qi Capital, which manages over 30 billion yuan ($4.3 billion) with a focus on new auto energy, smart driving, and advanced auto manufacturing, the group also invests via Hengxu Capital, its direct investment and fund-of-funds (FOF) platform.