Shanghai-listed chemical products provider Zhejing Jiahua Energy Chemical Industry Co., Ltd said on December 8 that it has co-launched a semiconductor industry fund with a corpus of 3 billion yuan ($458 million).

The debut size is set to reach 150 million yuan ($23 million).

The largest limited partner (LP) Yantai Longhe Investment will seed 2 billion yuan ($306 million) in the fund holding a 66.6 per cent stake, followed by Jiahua Energy and Wuhan Jusheng Investment Fund who will contribute 500 million yuan ($76 million) each and will each hold a 16.7 per cent equity.

Jusheng Fund Management will act as the general partner (GP) by injecting 1 million yuan ($152,666).

Upon completion of the transaction, the fund will conduct mergers and acquisitions activities in integrated circuit design industry.

Jiahua Energy, set up in 2003, manufactures and distributes chemical products consisting of chlor alkalis, sulfuric acids, and fatty acids, among others. The company was listed in Shanghai in 2003. As of December 9, its market valuation is 15 billion yuan ($2.3 billion).

According to its recent filing in October, its sales earnings in the first nine months over the past two years stood at 3.9 billion yuan ($599 million) in 2020, and 4.1 billion yuan ($621 million) in 2019.

With the deal, Jiahua Energy expects to foray into the semiconductor area through making investments and nurturing startups, in partnerships with venture capital players.

The GP Jusheng Fund Management, which was owned by financial service provider Chinese Group, is a PE fund manager. Its sub-fund Wuhan Jusheng Investment Fund through its controlling portfolio Kehua Yinsai Investment has successfully invested in Shenzhen-listed Hai Bo Heavy Engineering Science and Technology and Shanghai-listed Kangxin New Material.

Contact editor Marcus Ryder (marcusryder@caixin.com)

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