government industry funds play an important role in pooling funds, fostering industries, and promoting scientific and technological innovation and coordinated regional development. therefore, local governments have also set up local government guidance funds to promote industrial upgrading and economic development. the insiders believe that the government industry fund may be gradually marketized in the future, so it is suggested to encourage the exploration of diversified investment. in addition, the fault-tolerant mechanism and incentive system can mobilize the enthusiasm of the team and improve the efficiency of the use of government funds.
positioning in industry guidance
solve the problem of market failure
compared with market-oriented funds, government industry funds have different positioning and functions. in essence, when the utility of allocation of equity capital through the market fails, the government should set up policy funds to strengthen the supply of government funds for equity investment and give play to the functions of government coordination, allocation and financial support. the investment effect of government industry foundation, social capital and financial funds is further amplified, and the supporting mode of financial promotion of industrial development is further optimized to form a virtuous circle.
suzhou industrial fund believes that in the same market environment, industrial funds usually have clear investment requirements. in the process of investment selection, in addition to financial returns, they are more concerned about the role of investment in promoting local industries and the strategic significance of local economic development. in the post-investment process, due to the deep connection between industrial fund and local government, the resources that can be provided for the bided are also more abundant, and there is an incentive to provide additional resources for the fund to ensure the realization of industry guidance function.
based on this positioning and strategic significance, industrial funds have been set up in recent years to promote local scientific and technological innovation and economic development through the establishment of local government guidance funds. in 2018, beijing set up a 30 billion yuan mother fund for scientific and technological innovation, focusing on hard technology and early investment. in 2019, the sichuan regional coordinated development investment guide fund will be set up with a planned scale of 5 billion yuan, which will be mainly used for equity participation in regional sub-funds and direct investment in sichuan's "5 1" modern industrial system construction, modern service industry, ecological and environmental protection industry and other projects.
chen zhi, general manager of guangdong yueke parent fund investment management co., ltd., said that the government industry fund originates from the extension of government functions and aims to achieve a variety of established policy goals such as entrepreneurship support, economic revitalization or industrial strategic transformation. however, there are also differences and gaps in opportunities, capabilities and limitations between government industry funds and market-based funds.
"compared with market-oriented funds, the biggest advantage of government-guided funds is to solve the problem of market failure. on the one hand, for strategic projects with large investment amount and long investment cycle, market-oriented funds are reluctant to participate due to profit-seeking, so the government guide fund can play a guiding role first. on the other hand, government guidance funds can play a market role to support enterprises in the early stage of insufficient funds and the lack of policies in the development process." "said sun zhigang, managing director of beijing high-tech industrial development fund.
sun zhigang believes that the positioning and functions of the government guide fund can be understood from four perspectives. second, focus on the industrial development goals, further strengthen the chain to complement the chain, through the implementation of key projects and development to achieve economic goals; third, cooperate with market funds to promote the development of emerging industries and innovative industries. fourth, through industrial and financial cooperation, we should support the development of the real industry with financial work.
in sun zhigang's opinion, the government guide fund, as an important tool for the country to realize industrial upgrading, has prominent advantages in policy mobilization and resource aggregation, which is more conducive to promoting the development of finance from virtual to real. in addition, for key industries, the government guidance fund can accelerate the construction of the ecological system. through in-depth study of the industrial roadmap and technological development, financial instruments can be used to promote project investment and the implementation of major projects, so as to achieve key industrial breakthroughs and leapfrog development and form an industry closed-loop ecology.
funding for development
improve incentives to increase efficiency
special positioning and functions also enable the government industry fund to play different roles, which can not only directly provide the source of funds, but also guide the flow of funds, cultivate industries and promote regional economic development. in the view of the insiders, in the future, the government industry fund can further improve the incentive mechanism and assessment system to improve the efficiency of the use of funds while playing its role.
chen zhi said, in recent years, the role of government involvement in industrial investment is gradually shift, from direct investors into indirect investors, guide more private capital into the venture investment field, the government should play a role of financial capital leverage amplification, overcome simple through the market allocation of capital market failure problem, support the development of innovative small and medium-sized enterprises.
in chen zhi's opinion, one of the most direct functions of government industry fund is to guide social capital to gather and form capital supply effect. the establishment of government industry fund can effectively improve the supply of capital and solve the problem of capital source. in addition, it also regulates economic development by guiding the direction of capital. for example, funds should be directed to invest in high-tech innovative enterprises and small and medium-sized enterprises with innovative capabilities, and national industrial policies should be implemented. it is also possible to set up government industrial funds to guide social funds to invest in the central and western regions and ease the imbalance in economic development between regions.
sun zhigang thinks, government industry fund ought to have industry to guide, industry nurtures wait for a multi - function. first, the government guide fund not only promotes the implementation of high-quality projects, but also solves the bottleneck of industrial development. we should also encourage the exploration of diversified investment forms while strengthening risk control.
he also suggested that government guidance funds should establish appropriate fault-tolerant mechanisms and incentive mechanisms. 'managers of government-guided funds need to be familiar with the parent fund, sub-fund, industry and project, and have great management responsibilities,' he said. appropriate incentive mechanisms should be established at the parent and sub-fund levels to promote the development of the industry in a more positive direction.
suzhou industry fund, also thinks the government industrial fund to boost local economy has been verified, around also have relatively mature appraisal system to ensure the realization of the guide, future should better balance the relationship between policy guiding and market-oriented operation, mechanism and by reasonable equity incentive system to motivate the team to further improve the quality of project, and increasing the service efficiency of government funds.
chen zhi believes that the future government industry fund will be under the guidance of policy and market competition is more and more market-oriented, which will be conducive to improve the operation of venture capital fund management team around and professional ability, can effectively solve throws the enterprise financing difficulties, encourage more investment of social capital to participate in the emerging industry.
we must fight against epidemics and improve people's livelihood
support the invested enterprises to resume production and construction
according to the arrangements of the cpc central committee and the state council, while fighting the epidemic, all regions have focused on economic operation, production and life. think of chinese securities investment fund industry association, should give full play to the government industry cooperation funds, all kinds of private equity and venture capital funds, quickly return to support all kinds of enterprises and expanding production play a role of powerhouse, preparations for the new coronavirus detection and antiviral vaccine research and development production to provide targeted funding support, achieve the funds in place, the resources, professional services in place.
according to the survey of the association, under the impact of this epidemic, smes have great difficulties in cash flow, financing and operating costs. the government industry fund has great potential in helping enterprises to scientifically design plans for resuming production in accordance with local government epidemic prevention arrangements, increasing investment, providing capital and resource support for enterprises to resume production and employment, and stabilizing social employment.
according to the association's statistics, by the end of the third quarter of 2019, private equity funds had invested 11,300 medical devices and services, medicine and biology and other medical and health projects, with a capital of 425.2 billion yuan. among them, the government industry fund invested 1,287 projects, with a total investment of 35.452 billion yuan. in addition, 11 private equity and venture capital fund managers invested in the development and production of new coronavirus detection agents and systems, and the development of antiviral vaccine have made significant achievements.
that should encourage and support more government industry fund long-term funds to choose professional, trustworthy, responsible private equity fund managers, companies such as resistance to disease to provide precise and direct financial support and technical support, as much as possible in excavation and support medical research, medical equipment production enterprise key areas, such as fast formation in fighting the epidemic scientific research and production application.
source: ifeng.com