Core Viewpoint - The collaboration between the Asian Infrastructure Investment Bank (AIIB) and the Hong Kong Monetary Authority (HKMA) aims to support venture capital funds focused on emerging markets in Asia, marking a significant shift as both institutions transition into roles as limited partners (LPs) in the venture capital space [1][3][6]. Group 1: Strategic Collaboration - AIIB and HKMA have signed a strategic cooperation agreement to jointly invest in venture capital funds targeting Asian emerging markets [1][3]. - This partnership is expected to leverage AIIB's extensive experience and network in emerging markets to identify investment opportunities with appropriate risk management frameworks [6]. - The collaboration aims to enhance the development of green and technology-driven infrastructure in Asia, while also fostering Hong Kong's venture capital ecosystem [3][6]. Group 2: Market Context - The partnership signifies the emergence of a major LP in the venture capital landscape, which has been facing a shortage of market-driven LPs in recent years [8][12]. - Recent data indicates a significant decline in fundraising for foreign currency funds, with only four foreign currency funds raising approximately 4.468 billion RMB, a 77.9% year-on-year decrease [9]. - The lack of market-driven LPs has been a critical issue for VC/PE firms, compounded by stringent requirements from state-owned LPs and declining market conditions [12][13]. Group 3: Future Prospects - The collaboration is expected to lead to further financial innovations, including the issuance of multi-currency bonds to attract market funds for green and sustainable development projects in the region [6]. - The establishment of a national venture capital guiding fund has been proposed, which could mobilize nearly 1 trillion RMB in local and social capital over a 20-year period, seen as a potential turning point for the venture capital market [13]. - Positive signals from recent initiatives, such as the approval of technology innovation bonds, are viewed as crucial for revitalizing the investment landscape [14][15].