On Thursday, according to the Asset Management Association of China, Xiaomi Private Equity Fund Management Co., Ltd. officially completed its registration process on December 13. The actual controller of the fund is Lei Jun and it will have a registered capital of 1.1 billion yuan ($172.73 million). The fund will be 100% controlled by Xiaomi Corporation.
The company was established on May 7, 2021 but the firm has yet to bring any accounts under its management. Its legal representative and executive director is Xing Song while Liu De serves as the firm’s supervisor. Its business scope includes private equity investment fund management and venture capital fund management services.
Private equity investment funds are mainly used to invest in unlisted start-ups, often companies that have the highest risks and longest investment cycle. Once successful, early investors can see substantial profits. Private equity investments can be funded by individuals or companies, but these shares cannot be traded in the secondary market.
The Xiaomi Private Equity Fund is wholly owned by Xiaomi. At present, the fund wholly controls two enterprises, namely Hainan Jimu Venture Capital and Beijing Xiaomi Enterprise Management. Meanwhile, it indirectly holds other four companies.
It is not uncommon for large companies to set up equity investment funds. For example, in April 2019, Huawei Investment & Holding established a wholly-owned subsidiary, Hubble Technology Investment, with a registered capital of 700 million yuan. The company is wholly controlled by Huawei Investment & Holding, and its business scope includes venture capital management.