Israel’s venture capital giant
Pitango, run by Nechemia Peres, son of Israeli President Shimon Peres, is in talks with
“Pitango is a big name in Israel but still little-known in China, so now it should be the right time for Pitango to team up with a right partner to expand its investments in China like what its rivals have already done,” said one source.
No agreement has been inked between the two parties, said the sources, who declined to be identified as the negotiations are confidential. Pitango hopes to mainly invest in China’s technology-related sectors through the new fund, they said.
Shenzhen Capital declined to comment.
An official at Pitango said the firm has had close strategic relations with Shenzhen Capital for several years.
“For a long time now we have been examining cooperation and projects in China,” the official said. “A year ago we made our first joint investment in Jinko [Solar Energy Co.] and we continue to work towards finding joint activities and strategic investments in China.”
Jinko, based in the Xuri area of the Jiangxi Province, last year raised $35 million from Pitango, Shenzen and CIVC Partners, according to Thomson Reuters (publisher of PE Week).
Earlier this month, Wilson Lee, president of Shenzhen Capital, based in the Chinese boomtown of Shenzhen, bordering Hong Kong, told Reuters that the firm aims to double its funds under management to more than $2.48 billion in three years.
Last week, sources said that a Pitango delegation led by Peres was set to travel to China to meet government officials and business partners including senior representatives from Shenzhen Capital.
The local Shenzhen government has shown strong support to Pitango’s plans for a Chinese fund, which would also need approvals from financial regulators in Beijing, said the sources.
Herzliya-based Pitango, which in 2007 raised $330 million for its fifth fund, would not be the first Israeli firm to go to China.
Tel Aviv-based Infinity Venture Capital raised about $300 million for Infinity Israel-China Fund, which closed in 2007. Infinity was launched by a group consisting of IDB Holding subsidiary Clal Industries of Israel, state-owned China Development Bank and China Singapore Suzhou Industrial Park Ventures Co., a firm backed by both the Singaporean and Chinese governments. —George Chen and Tova Cohen, Reuters