China International Capital Corp, the country's leading investment bank, has approval from the authorities to raise 5 billion yuan (US$772 million) for its latest yuan-denominated fund to tap the nation's lucrative private equity sector.
The first fund to raise money from limited partners other than securities firms themselves will target opportunities arising from industry consolidation and mergers and acquisitions.
CICC Investment Group Co will be the only general partner for the fund while listed firms and private companies can become limited partners with an investment of 50 million yuan.
CICC has raised 1 billion yuan in the first round and fund raising may close in the next few weeks, said Shirley Chen, its managing director and head of private equity.
Shenzhen-listed Jiangsu Yanghe Brewery Joint-Stock Co, a wine and spirits producer, said in a statement in March that it has invested 300 million yuan to become one of the limited partners of the CICC fund.
In September last year, CICC set up a dollar fund worth US$500 million in Hong Kong.
By the end of last year, 31 domestic brokerages have been approved to set up direct investment firms with a total registered capital of 22.51 billion yuan. Last year, they invested 6.5 billion yuan in 147 firms, according to China Venture, a PE analysis website.
