Fortis and Haitong to raise second PE fund for China

According to reports, Belgium and China are planning to raise close to 3bn yuan for their second joint private equity fund with a focus on small Chinese companies.

The planned fund, to be called China-Belgium Direct Equity Investment Fund II, follows a similar fund launched in 2005 that is now fully invested, the sources said.

In 2005, European financial group Fortis and Haitong Securities, one of China's largest brokerages, won permission from Beijing to set up an asset management joint venture in Shanghai to manage the 1bn yuan China-Belgium Direct Equity Investment Fund I.

Institutional investors of the first China-Belgium fund include some funds from the Belgium government, Fortis, China's Ministry of Finance, China Development Bank and some other Chinese private enterprises.

It is unclear if Fortis may still contribute capital to the second China-Belgium fund as Fortis was carved up by the Dutch, Belgian and Luxembourg governments in October, with French bank BNP Paribas buying the Belgian operations after a EUR11.2bn cash injection failed to calm investor concerns.

The second fund will be run by Haitong-Fortis Private Equity Fund Management Co Ltd.

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