Singapore-based lender Oversea-Chinese Banking Corp. Ltd. (OCBC) has set up a qualified private equity fund to invest in onshore Chinese companies. This will potentially allow the bank to raise an onshore renminbi fund.
According to Wall Street Journal, renminbi is the formal term most often used by Chinese officialdom to refer to the country's currency. Renminbi, abbreviated as RMB, literally means "People's Currency". Yuan is renminbi, but is more likely to be used in everyday interactions.
Reuters, citing a report by Singapore's Business Times, said that the $100 million fund was created under the Shanghai Qualified Foreign Limited Partner (QFLP) program. QFLP allows the fund to convert up to $100 million of foreign currency into renminbi and invest it onshore in domestic Chinese companies over the next five years.
To manage the fund, OCBC has established the fund manager OCBC Capital Equity Investment Management Co. in Shanghai, Business Times said in a separate report.
The said fund management company would allow OCBC to take its China ambitions one step further by subsequently raising onshore renminbi capital for investing via a new fund, the report said.
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