In alliance with several Hong Kong partners, an investment arm of Chemical Banking Corp. has launched a mutual fund that makes direct investments in three fast-growing provinces in China.

The fund, the Shanghai Commercial Investment Fund, was put together by Chemical Venture Partners and partners including investment bank Lippo Asia Ltd. and Shanghai Pudong Development Bank, one of the first private banks in China.

So far, the fund has raised $20 million of the $100 million it initially seeks.

The fund, which was launched last month and is incorporated in the Cayman Islands, invests in a number of businesses in Shanghai, China's largest commercial city, and neighboring Zhejiang and Jiangsu.

Founded in 1984, Chemical Ventures Partners manages over $2 billion in direct investments, which include venture capital and buyout transactions.

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