Nanostart AG: Market Entry in China
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Nanostart AG has entered into a joint venture through its Asian subsidiary Nanostart Asia Pte. Ltd. with the Chinese asset manager Westbridge Asset Management Ltd.
The venture capitalist has a 50 per cent stake in the newly founded asset manager Nanostart Westbridge Company Ltd, based in Hong Kong.
Over the coming months, the asset manager will be launching funds in China in association with the Chinese government. The first funds are already expected to have a cumulative volume in the range of triple digit millions of euros.
A significant amount of the fund volume is to be invested in Germany, the rest regionally in China. The funds will be invested in high-tech companies with a focus on nanotechnology, but may also take a share in promising technology companies with no connection to nanotechnology.
The aim is to offer the German holdings of the funds a bridge to Chinese partner groups with access to the Chinese market. Chinese corporates can thus benefit from the innovative strength of German companies, whilst emergent German technology companies will be able to use the associated cooperation to gain direct access to customers in one of the largest and most dynamic sales markets in the world.
The Chinese partner’s team has a longstanding track record and has already launched several venture capital funds with the Chinese government.
The first venture capital funds will originate in the Jiangsu province, and the newly founded asset manager is working closely with the government of this region. Jiangsu, a province with one of the fastest developing economies in China, has a population of around 80 million.
The economic strength is demonstrated by the highest per capita gross domestic product of all the provinces in China. In the past year, the gross domestic product was around 1 billion euros - about half that of India.
“Our new asset manager Nanostart Westbridge is not only the result of almost two years of intensive work in China, but it also marks the most significant strategic event in the history of Nanostart AG. For Nanostart AG, the joint launching of funds with the Chinese government represents a successful market entry into the second largest national economy in the world and has the potential to raise us to a leading asset manager over the coming years”, explains Marco Beckmann, chairman of Nanostart AG. “The cooperation with the government so far has been based on mutual trust and has the mutual goal of rapidly achieving a significant size with a multitude of funds that are being developed now”.
“We are delighted to have found an internationally experienced partner in Nanostart AG, whose global network offers outstanding opportunities to lead the newly developed German-Chinese venture capital funds to great success”, adds Dr KK Chan, Managing Director of Westbridge Asset Management Ltd. “With our funds, we are a first mover in an emerging class of internationally oriented venture capital funds and we are enabling the accelerated growth of emergent technology companies in two of the most important markets in the world”.
The operational responsibility, or in other words the fundraising and fund management, lies with the Chinese partners. Nanostart chairman Marco Beckmann, as the delegated member of Nanostart AG, will be representing the interests of the company on the management board of Nanostart Westbridge Co. Ltd.
As a general rule, the asset manager will receive a fixed remuneration of 2% of the fund volume (so-called “management fee”) for the launched funds, as well as a performance-related remuneration of up to 20% of the income from the funds (so-called “carried interest”).
