Baidu Inc (ADR) (NASDAQ:BIDU) and China Life Insurance Group have plans to create a private equity fund worth $1 billion and its main target will be investments in various technologies including the internet.
The announcement was made on Thursday by China Life’s listed division China Life Insurance Co Ltd, revealing that the two have engaged in a partnership through which they plan to launch the $1 billion fund. A Hong Kong Stock Exchange statement revealed that Baidu will contribute 1.4 billion Yuan while China Life will produce the bigger share at 5.6 billion yuan. This will bring the total contribution to 7 billion yuan which is equivalent to $1 billion.
“The Baidu Fund Partnership will focus on middle to later stage investment, including unlisted companies with “significant association” with China, in the Internet sector, including mobile internet, artificial intelligence, and internet finance,” the statement noted.
The statement also pointed out that the partners will initially be responsible for 30 percent of their contribution. The announcement marks the latest fund that involves Chinese giants. Major Chinese companies have been kicked their investments into high gear this year as they look to bet their money on future developments.
Firms such as Alibaba Group Holding Ltd (NYSE:BABA) have spearheaded various funds particularly focused towards investment in technology as well as the internet as they look to leverage more growth and upcoming opportunities. Such funds particularly target markets that have a lot of potential but are often limited due to lack of funding. The internet has been a major focal point for these firms especially due to the potential for growth in emerging markets.
The Baidu-China Life fund will most likely focus on startups that focus on e-commerce opportunities in the emerging markets. However, the report did not go into details about how the investments will be carried out. They are expected to reveal these details in the future. The $1 billion fund is one of the biggest private equity funds that have been launched recently.
Baidu stock closed the latest trading session on Friday at $225.55 after a 0.31 percent gain from the previous close.