KUALA LUMPUR: Warrants Capital Ltd has signed an agreement with Chinese-based Huatai Financial Holdings (Hong Kong) Ltd to set up a Malaysian private equity fund investing in natural resource-based companies here.
Warrants Capital is a joint venture between Silver Ridge Holdings Bhd and Von Capital Ltd.
The private equity fund, to be called the Huatai Von Malaysia Fund, will have an initial size of US$500 million (RM1.59 billion).
It is expected to be launched next month and will be domiciled in the Cayman Islands.
This fund will not only focus on stocks of listed entities but also loan stocks and warrants. Unlisted entities with potential of an initial public offering will also be considered.
Hua Tai Financial, Warrants Capital and cornerstone investors have already put up a seed fund of US$5 million (RM15.9 million) for the private equity fund.
It is now looking for more investors to build up the fund.
Warrants Capital has also been appointed by Huatai to market and distribute all their products and services outside of China, Hong Kong, and Chinese Taipei.
Hua Tai Financial Holdings director Stephen Wong said that would include the marketing and distribution of Hua Tai's Huatai HK RMB Stable Fund, a private equity fund that invests in renmimbi denominated bonds.
"We see tremendous business opportunities in this area especially with regards to renmimbi denominated products. The Chinese currency is viewed as an appreciating currency and this is a must-have in global investment portfolios," saud Silver Ridge chairman Datuk Md Alwi Haji Che Ahmad in his address to attendees of the signing ceremony.
Hua Tai Financial Group's parent company Huatai Securities Ltd is one of 10 major comprehensive licensed securities corporations in mainland China.
It ranked first in terms of market share of brokerage business in 2010.
Huatai's subsidiaries include securities brokerage companies, fund houses, futures brokerage companies and bank.
Source: BUSINESS TIMES