- New funds target sectors including fusion energy, hydrogen and private equity secondary trading
- Move reflects broader efforts to improve capital circulation and support strategic industries
Hangzhou has launched two new government-backed investment funds totaling 1.5 billion yuan ($220 million), as the eastern Chinese tech hub steps up financing support for low-carbon technologies and private equity liquidity.
The funds were unveiled during the 2026 “Fortunate Meeting Hangzhou” innovation and entrepreneurship conference on May 15. They include a 1 billion yuan low-carbon development fund and a 500 million yuan secondary, or S, fund focused on private equity share transfers.
The Hangzhou Low-Carbon Development Fund was initiated by government-affiliated Hangzhou Capital with backing from state-owned and industrial investors including Hangzhou Energy Group, Hangyang Group and Hangzhou Cogeneration Group.
The fund will invest in areas including fusion energy, hydrogen power, energy equipment, cryogenic technologies and related advanced materials. The structure brings together municipal state capital with listed industrial companies tied to energy and manufacturing.
Separately, the Zhejiang Strategic Emerging Industries S Fund was up and running on the same day, jointly established by Hangzhou Financial Investment Group, Zhejiang Equity Exchange Service Group and Zhejiang Innovation Investment Group, alongside local government investors.
Unlike traditional venture capital funds, S funds focus on secondary transactions of private equity stakes, allowing existing investors to exit while recycling capital back into the market.
‘Get idle money moving again’
The fund is intended to support Hangzhou’s pilot program for private equity share transfers, improve liquidity in China’s venture capital market and strengthen the Qiantang River Financial Harbor development zone.
Guo Haiyue, deputy general manager of Hangzhou Financial Investment Group’s investment development department, said the goal of S funds is to “get idle money moving again.”
“Existing investors gain an exit channel, while new capital can re-enter the market,” Guo was quoted as saying in local media reports. “As capital circulation improves, expectations for the primary market may also recover.”
The latest launches align with a provincial blueprint to accelerate the development of merger-and-acquisition funds and secondary private-equity funds, as part of efforts to build a “patient capital” ecosystem supporting technology innovation.
