BoCom to raise $758mn for renminbi investment fund

The bank’s BoCom International Holdings (Shanghai) Co. will manage the fund that will further diversify its business.

Bank of Communications Co. said Tuesday it will raise CNY5 billion (US$758 million) for a yuan-denominated investment fund, the latest move by China's fifth-largest bank to diversify its business.

The Shanghai-headquartered lender's move comes after Shanghai relaxed rules to allow qualified foreign investors to switch foreign currency for yuan for the purpose of making private-equity investments, as part of the city's plan to become a global financial center.

State-owned BoCom said in a statement that Singapore's Kheng Leong Co. Pte. Ltd. will contribute $100 million to the fund, which will invest in both state- and privately owned companies with growth potential and sound management.

Kheng Leong Co. is owned by the Wee family in Singapore, which also controls Singapore-listed United Overseas Bank Ltd. , brokerage firm UOB-Kay Hian Holdings Ltd. , and Haw Par Corp.

"The launch of the fund is the bank's first trial in China's equity investment industry," China's fifth-largest lender by assets said in the statement.

BoCom, which has licenses in trusts, asset management and insurance, added its wholly owned unit BoCom International Holdings (Shanghai) Co. will manage the fund.

View the full story in The Wall Street Journal.