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Barr Ellison Solicitors – commercial property
27 September, 2006 - 10:46 By Staff Reporter

£250m Cambridge-China fund proposed

A £250 million Cambridge-China technology mega fund is being mooted following meetings between East of England influencers and the China Development Bank.And in a parallel initiative, Cambridge executives are urging the bank to either directly inject smaller but critical levels of capital – up to £2m – into fledgling tech East of England companies or pump equivalent sums into existing early-stage technology funds in the region.

The Sino-Cambridge summit produced one of the most animated dialogues on a tour by China Development Bank of key European hi-tech hotspots designed to identify inside-track opportunities in disruptive science & technology.

Bank executives and officials are benchmarking a potential Cambridge war chest against their current funds in Belgium, equating to £269m, and Switzerland, £42.5m.

Detailed propositions from Cambridge have been requested and one of the key drivers locally, Professor Alan Barrell, believes Cambridge – with its world class biotech and wireless clusters and market leads in segments such as genomics, stem cell science, photonics, plastronics and nanotech – “would merit at least as much investment as Belgium.”

Professor Barrell has proposed a two-tier approach to potential Chinese funding of Cambridge hi-tech.

He says: “Firstly, there is a case for a very large Sino-Cambridge fund of around £250m. Secondly, it would be good to see parallel Chinese investment that will test the very early stage investment market with, say, injections of around £2m into completely new early-stage tech funds or existing ones, such as ET Capital’s ET2 fund.

“To encourage continued investment at the younger end of the market, I would like to see the bank send one or two Chinese executives here to work with our fund teams and learn the ropes. The Chinese have billions in terms of funding and massive potential but perhaps do not have a working knowledge of backing university spin-outs and other fledgling tech businesses. That is something we could teach them.

“Working with Cambridge in this way would not involve money they could not afford and would not entail any great risk. While the Chinese seek to attract growing Cambridge businesses that are keen on establishing operations in China they need to recognise that some of the most exciting tech tyros have no means to expand immediately into China.

“They need to be nurtured so a Sino-Cambridge seed fund, behind a mega offering, would allow these young companies to be properly nurtured to a stage where they can expand internationally.”

The China Development Bank delegation met leading Cambridge influencers at St John’s Innovation Centre, 3i, Library House and the Babraham Bio-Incubator with Prof Barrell and Jimmy Wang of Cambridge China Venture Park acting as facilitators.

In another exciting development, Weigao Polymer Corporation – a £50m turnover company listed on the Hong Kong Stock Exchange, that makes millions of blood transfusion packs and other medical devices – is using the East of England as a springboard to European growth through acquisition.

Building on an initial collaboration with the University of Essex, Weigao has established a UK business in the county – Weigao Medical Europe Ltd – and is considering the acquisition of a UK based medical devices company with existing channels to market in Europe, and a share issue on AIM.

Chinese pharmaceutical companies have also identified the East of England as a fast-track to AIM listings.

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