Shanghai Launches RMB Investment Fund

21 February 2012

The Shanghai government-owned Shanghai International Group has led a group of official and private investors to establish a substantial renminbi (RMB)-denominated fund that targets the financing of Chinese corporate investment overseas.
The RMB50bn (USD7.9bn) Sailing Capital International fund, which was set up on February 16, 2012, is expected to leverage some RMB150bn of total investments, or three times its original principal, by linking with bank finance.
It is hoped that the fund will aid both institutional investors and corporates in diversifying into overseas investments, and prioritize those investments that are priced and settled in RMB, as part of the globalization of the currency. In addition, it should encourage domestic companies to look at overseas expansion, possibly through mergers and acquisition opportunities.
The fund is also being looked on as part of the stated official intention that Shanghai will be a centre for onshore RMB trading, clearing and pricing by 2015, before it becomes an international financial centre by 2020.
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