Announcement on the Selection of Management Institutions for Wuxi Future Industry Angel Fund, the Strategic Emerging Industries Fund of Funds of Jiangsu Province
In order to implement the deployment requirements of the Jiangsu Provincial Party Committee and Government, leverage the role of long-term capital, patient capital, and strategic capital, accelerate the cultivation of future industries, and focus on creating an important battlefield for the development of new quality productivity, the Jiangsu Provincial Strategic Emerging Industries Fund of Funds (hereinafter referred to as the Provincial Fund of Funds) and Wuxi City jointly invested in the establishment of the Wuxi Future Industries Angel Fund, with a scale of 1 billion yuan. The selection of management agencies is now open, and the relevant matters are announced as follows:
1、 Basic principles of selection
（1） The principle of fairness, impartiality, and openness. According to the unified selection work rules, selection criteria, and scoring standards, the evaluation and review shall be conducted to ensure equal opportunities for all management agencies under equal conditions.
（2） The principle of following laws and regulations. The selection process strictly follows national laws and regulations, industry regulatory requirements, and relevant policy provisions, and carries out the selection of fund management institutions in accordance with laws and regulations.
（3） Adhere to the principles of market rules. Following market rules, expanding selection channels, and choosing high-quality fund management institutions that match the investment direction of the fund, have excellent management qualifications, strong management capabilities, and rich investment experience for cooperation.
2、 Basic Information of Wuxi Future Industry Angel Fund
（1） Fund positioning
Aiming to jointly cultivate forward-looking, strategic, and breakthrough leading future industries through provincial and municipal linkage.
（2） Organizational form
Limited partnership system.
（3） Registered address
Wuxi City, Jiangsu Province.
（4） Duration of existence
The duration is 15 years, including an investment period of 8 years and an exit period of 7 years.
（5） Capital structure
The total scale is 1 billion yuan, of which the provincial parent fund contributes 250 million yuan, accounting for 25%.
（6） Investment Model
1.Adopting direct investment method, the investment amount for a single project shall not exceed 20% of the total paid in capital of the fund.
2. Investment enterprises should generally meet the following requirements
(1) Registered and established within the territory of China (excluding Hong Kong, Macao, and Taiwan);
(2) When accepting investment, the number of employees shall not exceed 200, among which the number of employees with a bachelor's degree or above shall not be less than 30%; The total assets and annual sales revenue shall not exceed 30 million yuan;
(3) The establishment time for accepting investments shall not exceed 5 years (60 months);
(4) Not listed on domestic or foreign stock exchanges when accepting investment;
(5) The proportion of the total R&D expenses in the current year and the previous year to the cost expenditure shall not be less than 20%.
（7） Investment direction
Focusing on the "10+X" future industrial system in Jiangsu Province and the "5+X" characteristic development system in Wuxi City, we will focus on the layout of growth oriented future industries such as third-generation semiconductors, future networks, hydrogen energy, new energy storage, cell and gene technology, synthetic biology, general intelligence, cutting-edge new materials, zero carbon and negative carbon (carbon capture, utilization and storage), virtual reality, as well as cutting-edge future industries such as quantum technology, low altitude economy, deep sea and deep earth space, humanoid robots, metaverse, advanced nuclear energy, etc.
（8） Investment Region
1.The amount of direct investment in enterprises within Jiangsu Province shall not be less than the total investment amount of governments at all levels, and the proportion of direct investment in the total amount shall not be less than 70%. The following situations can be recognized as investments in enterprises within Jiangsu Province:
(1) Directly register enterprises within Jiangsu Province;
(2) Enterprises that relocate their registered address to Jiangsu Province after investment (the relocation of registered address occurs during the duration of the fund);
(3) Enterprises that have established their main production and research and development bases in Jiangsu Province through the establishment of subsidiary enterprises (with substantial business activities);
(4) Enterprises acquired by registered enterprises within Jiangsu Province (controlled acquisitions and included in the scope of consolidated financial statements);
(5) Other investments that can be recognized as investments in enterprises within Jiangsu Province.
2. The proportion of direct investment in enterprises in Wuxi, Jiangsu Province shall not be less than 75% of the total direct investment amount. The following situations can be recognized as investments in enterprises within Wuxi City, Jiangsu Province:
(1) Enterprises registered directly in Wuxi, Jiangsu Province;
(2) Enterprises that relocate their registered address to Wuxi City, Jiangsu Province after investment (the relocation of registered address occurs during the fund's existence period);
(3) Enterprises that have established their main production and research and development bases in Wuxi, Jiangsu Province through the establishment of subsidiary enterprises (with substantial business activities);
(4) Enterprises acquired by registered enterprises in Wuxi, Jiangsu Province (holding type acquisition and included in the scope of consolidated financial statements);
(5) Other enterprises that can be identified as investments in Wuxi, Jiangsu Province.
3. In principle, we do not invest in overseas projects. If it is necessary to invest in overseas projects, the fund management institution shall strictly review and fully demonstrate the necessity, compliance, and fund security measures for the outflow of funds.
（9） Investment Decision
1.The Investment Decision Committee is composed of 5 members, with more than half appointed by the fund management institution and 1 appointed by Jiangsu Gaotou Zhanxin Private Equity Fund Management Co., Ltd. (hereinafter referred to as the provincial parent fund management institution).
2. The rules of procedure and composition of the investment decision-making body shall come into effect after being reviewed and approved by the fund partners' meeting.
（10） Management fee
1.Investment period: 1.5% per year of the fund's actual paid in scale;
2. Exit period: 1.5% of the initial investment cost per year for projects that have not been exited;
3. Extension period and liquidation period: no management fee will be charged;
4. Establish a mechanism for retrospective adjustment of management fees. Upon the expiration of the investment period, the funds that have not been invested by the fund should be returned and reduced. Any excess fund management fees collected should be promptly refunded or retained as a deduction for the fund management fees during the exit period.
（11） Threshold income and performance compensation
No threshold rate of return is set, and the performance compensation of management institutions is 20% of excess returns.
（12） Negative List
Funds are not allowed to engage in the following businesses:
1.Engage in guarantee, mortgage, entrusted loan and other businesses;
2. Investing in secondary market stocks (excluding participating in targeted issuance of listed companies), futures, real estate, securities investment funds, corporate bonds, trust products, wealth management products, insurance plans, and other financial derivatives;
3. Provide sponsorship or donations to any third party;
4. Absorbing or indirectly absorbing deposits, or providing loans and fund lending to third parties;
5. Make external investments with unlimited joint and several liability;
6. Illegally raising funds through issuing trusts or collective wealth management products;
7. 'Famous stocks and real bonds',' Famous funds and real reserves';
8. Investing in projects that are prohibited, restricted, or do not comply with relevant national industrial policies;
9. Using fund investment as a preferential condition for attracting investment;
10. Other businesses prohibited by national laws and regulations.
（13） Management operation requirements
The operation of fund management should comply with the relevant requirements of the provincial government investment fund management system and the provincial parent fund management system, and should implement the following management requirements:
1.The fund management institution shall compile an investment field directory under the guidance of the provincial parent fund management institution, and the fund shall carry out investments in accordance with the investment field directory;
2. The direct investment projects of the fund shall be subject to pre examination by the provincial parent fund management institution;
3. Funds should choose commercial banks with custody qualifications as custody institutions. The custody institution shall be selected through public selection and shall come into effect after being reviewed and approved by the fund partners' meeting; The custodian bank shall be one of the domestically systemically important banks (or its branches) recognized by the People's Bank of China and the State Administration of Financial Supervision and Administration, and the fund custodian bank account shall be directly connected to the provincial parent fund investment management system;
4. The fund management institution shall regularly update the investment operation of the fund in the provincial parent fund investment management information system;
5. Fund management institutions should regularly prepare reports and submit them to provincial-level parent fund management institutions
(1) Submit a quarterly fund management report within 30 days after the end of each quarter, including information on fund investment operations, project progress, and fund utilization; Within 10 days after the end of each quarter, issue a balance sheet, income statement, and cash flow statement;
(2) Within 2 months after the end of each year, submit the fund's annual investment plan, investment demand plan, fund valuation report, and valuation basis; Submit audited fund financial reports and annual management reports within 4 months after the end of each year;
6. Provincial parent fund management agencies conduct annual assessments and evaluations of funds. The actual annual provision of management fees for the fund is 80% of the accrued amount for the current year. Among the remaining 20%, 10% of the accrued amount for each year is linked to the assessment and evaluation results for the current year. Those with poor assessment and evaluation levels for the current year will not be provisioned; Another 10% will be accrued in a lump sum during fund liquidation, and no provision will be made for those whose principal has not been fully recovered during fund liquidation. The specific implementation methods for assessment and evaluation shall be separately formulated by the provincial parent fund management institution;
7. Provincial parent fund management institutions conduct annual and special supervision inspections on the operation of fund management;
8. Provincial parent funds may, in accordance with laws and regulations, implement excess returns and early transfer exit benefits for fund related investors.
3、 Declaration requirements for management institutions and teams
（1） Regulatory requirements
The relevant standards for selecting management agencies shall not be lower than the following conditions:
1.Should be registered with the China Securities Investment Fund Industry Association;
2. In principle, the institution or its controller should be a leading institution in the private equity and venture capital industry (having been listed among the top 50 early investment institutions, venture capital institutions, or state-owned investment institutions in authoritative rankings such as Qingke, Zhongtou, and Rongzhong in the past three years), or a leading institution in a segmented industry field (among the top 50 segmented industry rankings such as Qingke, Zhongtou, and Rongzhong);
3. Registered in Chinese Mainland, the paid in registered capital should not be less than 10 million yuan and should match the size of the fund under management;
4. The contribution ratio to this fund shall not be less than 1% of the subscribed capital and not less than 5 million yuan;
5. Having good fundraising ability and exit performance. In principle, the scale of private equity and venture capital funds managed by institutions should not be less than 5 billion yuan. At least 10 of the fund's direct investment enterprises have exited and achieved value preservation and appreciation through IPO, mergers and acquisitions, equity transfer, and other means;
6. Having a professional and stable team. At least 10 full-time staff members of the institution are dedicated to investment business, among whom at least 5 have more than 5 years of experience in equity investment fund management, with good professional ethics and reputation. Having a fixed place of business and software and hardware facilities suitable for its business;
7. Having a sound corporate governance and internal control management system. There are standardized project selection mechanisms, investment decision-making mechanisms, incentive and constraint mechanisms, risk control mechanisms, financial management mechanisms, etc;
8. The management organization and core management team members have no negative records of being punished by financial management departments or judicial authorities, and have no serious records of dishonesty.
After being selected as the fund management institution through the selection process, the management institution shall not arbitrarily change the equity, core management team, or management personnel. If any adjustments are necessary, they should be reported in writing to Wuxi Innovation Investment Group Co., Ltd. within 5 working days from the date of the adjustment decision. If there are significant adverse adjustments, Wuxi Innovation Investment Group Co., Ltd. has the right to re select or change the management organization.
（14） Management team requirements
1.Equipped with a dedicated management team of no less than 5 people, members should have relevant professional qualifications and investment experience in the relevant field, and have worked in the applying institution for no less than 3 years;
2. The core members of the dedicated management team (appointed to the fund manager and members of the investment committee) should all have more than 3 years of experience in equity investment management, and at least 3 people should have management experience in the entire process of "fundraising, investment, management, and withdrawal" of fund products of the same nature as Wuxi Future Industry Angel Fund in the applying institution. The above-mentioned fund products with the same nature as the fund refer to equity investment funds with the same or similar investment direction;
3. The management organization must ensure the stability of the core members, and the fund agreement must lock in the members of the fund investment decision-making committee and the core personnel of the management team. If there are any changes in the locked personnel, they must be voted on and approved by the fund's relevant authorities such as the fund partner meeting;
4. The historical performance of core members shall be ensured to be true and verifiable. Core members shall have served as key personnel or members of investment decision-making committees or appointed representatives in relevant funds, or as senior management personnel responsible for investment business in the reporting institution and relevant fund managers;
5. Before the completion of 70% of the fund investment progress, core members shall not raise or manage other funds with the same investment field, investment region, and investment stage;
6. The management team must establish a risk benefit binding mechanism in the fund.
4、 Selection Procedure
The fund management institution is publicly selected by Wuxi Innovation Investment Group Co., Ltd., the initiator of the fund in Wuxi, and the provincial-level parent fund management institution participates in the selection process.
The selection process includes:
（1） Publish an announcement. On the official website of Wuxi Innovation Investment Group Co., Ltd（ https://www.wuxicapital.com.cn/ ）Announcement: The deadline for application is October 8, 2024;
（2） Preliminary review of materials. Conduct a preliminary review of the completeness, comprehensiveness, and feasibility of the application materials, exclude application plans that do not meet basic requirements, and determine the list of preliminary institutions;
（3） Due diligence. Conduct due diligence on the initial selection institutions, focusing on comprehensive verification of important information such as registration and filing of management institutions, historical business, organizational structure, specialized operations, investment decision-making, post investment management, risk control, and finance, legal, and business;
（4） Expert review. Organize a review expert group to comprehensively review the application materials of the management institution, conduct comprehensive judgment and scoring through listening to due diligence reports, on-site inquiries from the application institution, etc., and determine the list of candidate management institutions;
（5） Decision making process. The fund initiator shall determine the selection results after completing the decision-making process;
（6） Result announcement. The selection results shall be publicly announced to the public for no less than 5 working days.
5、 Declaration method
（1） Please carry out the application work for fund management institutions in accordance with the requirements of this announcement, and prepare detailed application materials according to the attached requirements.
（2） The application materials shall be compiled into a unified volume, and the requirements for printing, format, cover, and binding are detailed in the attachment.
（3） Compilation of application materials in triplicate, submitted to Wuxi Innovation Investment Group Co., Ltd
(Address: 25/F, Guolian Financial Building, No. 10, Financial 1st Street, the Taihu Lake New Town, the Taihu Lake Street, Binhu District, Wuxi City, Jiangsu Province). Please send the scanned copy and Word electronic version of the application materials compilation to the email address: wxzx@wuxicapital.com.cn .
Contact: Manager 0510-83692288
