Chengdu’s appeal as gateway city wins favour among private equity, angel investors and boutique funds

Chengdu is seeking to become a financial industry hub in western China, leveraging its geographic location and ties to private equity, according to a top financial official of the city.

The megacity of 15 million has a vibrant financial service industry that’s home to 74 banks, 83 insurers, 248 securities and futures firms. And while the size of the financial services industry, estimated at 125 billion yuan, pales in comparison to Beijing and Shanghai, Chengdu ranks well ahead of other second-tier cities.

As central bankers and finance minister of G20 nations, along with heads of multilateral financial organisations converged in Chengdu over the weekend, officials sought to highlight the city’s success in attracting private equity firms.

Yinke Venture Capital itself is a witness to the growth of Chengdu’s venture capital and private equity industry. Founded in 2009 by the Chengdu government and China Development Bank with a 1.5 billion yuan in registered capital, the entity teamed up with other fund management firms to launch 18 funds. As of April the entity had combined assets under management of 6 billion yuan.

Wu Zhong, general manager of Yinke Venture Capital said previous regulations would have required a proportion of funds be channelled into local companies, however regulators appear to have withdrawn the requirement.

He added that the “non-market-oriented” rule was counter productive.