AgBank, Wuxi govt form $2.3bn fund

SHANGHAI: Agricultural Bank of China has launched a 15 billion yuan ($2.3 billion) private equity fund with the Chinese city of Wuxi to invest in high-growth sectors such as logistics and energy conservation, the bank said on Wednesday.

The country's third-biggest lender by assets said the first phase of capital injection into the fund, which will be based in Wuxi, near Shanghai, will amount to 5 billion yuan.

"AgBank (Wuxi) Private Equity Fund has combined AgBank's financial strength and Wuxi's strength in various industries," AgBank said in a statement posted on its website.

Chinese banks are rushing to join global players such as Morgan Stanley in setting up China-focused private equity funds to tap the country's booming economy.

Last year, an investment arm of Bank of Communications , China's No. 5 lender, said it aimed to raise $250 to $500 million for a private equity fund focused on investing in China.

Copyright Reuters, 2011