Simon Murray Group's first RMB 100 million onshore fund targets Wuxi 530 Plan companies
In 1997, Simon Murray established Simon Murray Group (“SMG”) under his own name, its subsidiaries include USD-denominated GEMS fund and Simon Murray & Company (“SMC”). In the past 12 years, SMG has an AUM of over USD one billion, and has successfully operated many projects like CNOOC and Sino-Forest. It is reported that the rate of return of GEMS has reached up to 55% in the last four years.
Having more than 40 years’ working experience has obviously boosted Mr. Murray’s confidence. After 14 years in Jardine Matheson in charge of construction and trading projects, Mr. Murray was appointed as the CEO of Hutchison Whampoa and served this position for 9 years in charge of multi-billion dollar businesses including telecom, consuming products, retailing, energy, real estate, transportation and logistics. All these experiences have provided him a strong network of diverse resources and sensitive instincts when judging investments.
Drawn by the emergence of RMB funds, Mr. Murray has decided to enter the Chinese market. SMC shall co-invest with Guolian Financial Investment Group to form its first sino-foreign joint venture fund of a RMB 100 million.
Both parties signed cooperation memorandum last month and are going to sign the joint venture contract very soon. “I hope the first fund can be closed by the end of this year. If all goes smoothly, we are going to raise larger scale fund with Guolian.” Simon told to CBN journalist with obvious confidence.
Emphasis on localization
Despite being a British citizen, Mr. Murray has given himself a Chinese name. “I have a Chinese name.” he said eagerly when introducing himself and wrote “马世民” (his Chinese name) on a note book, looking very animated, a marked contrast from his usual resolute and cautious investment style
Mr. Murray became serious when the discussion turned towards operation of the RMB fund.”Due to the emergence of RMB funds and some problems encountered by US dollar, we started considering using RMB-investment platforms last year.”
Simon emphasized that a RMB fund, as a local fund, needs to find local partners in order to take advantage in the local capital market. He said, “We discussed with more than 10 local governments over a year, and finally selected Wuxi Municipal Government and Guolian Group. Guolian’s localized resources and the engagement of Wuxi Guidance Fund can provide local support for the fund.”
“We know that there are so many good businesses included in the Wuxi 530 Plan and government has already granted them the first stage angel investments. Next, we are going to do a screen them for suitable investments.” added by San Eng, Managing Director of SMC. The fund is going to adopt a non-legal person entity structure, with a 30% commitment to invest in Wuxi.
According to this journalist’s survey, the 530 Plan is the Wuxi government;s initiative to attract 30 leading entrepreneurs from overseas into Wuxi in 5 years. And at the same time, Wuxi is going to launch its “three100, two 300” policy. (The government provides RMB one million as start-up grant, no less than 100 m2 workspace, no less than 100 m2 in housing; no less than RMB 3 million RMB venture capital and no less than RMB 3 million in capital guarantee – these are all funded by government finances.)
Currently, there are more than 20 530 companies’ with more than RMB one million in annual sales, with one reaching as high as RMB 100 milion.
Emphasis on adding value
Guolian Group was formed on 8 May 1999, is astate-owned financial and industrial holdings group with over RMB 30 billion in assets. Its major businesses cover equity investment, securities, trust and insurance.
It is known that, Guolian has found five partners and plans to form five funds. SMC is one of the few funds with foreign capital sources.
The newly established SMC-Guolian fund is going to invest primarily early stage growth company, focusing on consumer, technology, energy, environment-friendly and high-efficiency industries. “Always work to add value” was a recurring theme in the conversation with Mr. Murray. Using Jardine Matheson as an example, its market capitalization was only USD 100 million when he invested, and it grew to USD 5 billion in 10 years. He is at present still its director and intends to holdthe investment for the long term.
“We do not deliberately lock ourselves into a specific industry, but look for suitable investment targets to which we can bring value (such as technology and brands) via our team’s channels and strong international networkafter we invest. We are not interested in being a pure financial investor,” he said.
According to Mr. San Eng, SMC-Guolian RMB fund has already made projects assessment and two projects have caught their eyes. One is engaged in pet supplies retail and the other is in industrial packaging.