Canada and China to set up $1 billion resource sector fund

Vancouver’s Canaccord Financial Inc. and the Import Export Bank of China (Eximbank) announced this morning plans to establish a US$1 billion fund to invest in the Canadian resource sector.

A memorandum of understanding to create the “Canada-China Natural Resource Fund” (CCRF) was signed this morning by Paul Reynolds, president and CEO of Canaccord Financial, and Zhu Xinqiang, vice-president of Eximbank.

The MOU signing was witnessed by Prime Minister Stephen Harper, along with China’s Vice-Premier Li Keqiang.

The principal objectives of the CCRF are to:

  • invest in public and private natural resource and energy companies or projects in Canada and in companies that are listed, or have the potential to list on, Canadian stock exchanges;
  • promote interaction and sustainable development among Chinese, Canadian and other natural resources companies, and;
  • create opportunities for substantial returns on investment through the strategic and market-oriented allocation of fund capital.

“Canaccord’s deep knowledge of the resource sector and Canada’s strong natural resource industry will be highly complementary to the interests of investors and the continued demand for energy and other resources,” said Reynolds.

The fund intends to raise approximately US$1 billion from investors in China and abroad.

It will be structured and operated at arm’s length from its co-owners, with an independent management team responsible for maximizing returns for its limited partners.

A first closing is planned within the first half of 2012.

Jennifer Harrison

jharrison@biv.com

@JHarrisonBIV