Gov’t guidance fund to target diversification, local jobs

The new government guidance fund, approved by the Executive Council (ExCo), will seek to steer private investment into priority sectors and projects to diversify the economy, boost emerging industries and create higher-quality jobs for local residents.

The ExCo has concluded its discussion of a draft administrative regulation on the management of the government guidance fund, which will take effect the day after it is published. A press conference was held yesterday morning to outline the framework, which is designed to establish a clearly defined and risk-controlled system, guided by the principle of “patient capital” to channel private investment into key sectors, drive industrial upgrading and achieve long-term growth in the value of public assets.

According to a government statement, the guidance fund is intended to act as a catalyst for directing private investment into strategic industries, supporting industrial transformation and innovation, and generating quality employment. The fund’s regulatory framework sets out its objectives, governance structures, investment and operational rules, risk management measures, and a performance assessment and fault-tolerance system aligned with the patient capital principle.

The framework includes reinvestment clauses aimed at promoting local employment and talent development, with authorities identifying job creation as a key priority. The Secretary for Administration and Justice, Wong Sio Chak, said the fund is designed to drive Macau’s industrial development and economic diversification by introducing new technologies and industries, which will require both talent attraction and local talent cultivation.

Advisor Antonio Tam Chi Neng of the Office of the Secretary for Economy and Finance added that the fund would include reinvestment clauses in its investment contracts. “For example, we may require a company to make a certain contribution to Macau or hire a specific number of local employees. If they fail to meet these obligations, we will prudently proceed with compulsory exit,” he said.

Authorities stressed that compulsory exit mechanisms would also be triggered in cases of fraud or corruption to ensure the proper use of public funds.

According to the authorities, the fund will have an initial target scale of MOP20 billion and is expected to be established within the year.

Tam said at a press conference: “Once the administrative regulation is published, the next step is to establish the fund, which will be completed within this year. The first round of capital injection will be carried out through the established mechanism.”

The fund will receive an initial injection of MOP11 billion from the SAR government’s fiscal reserves accumulated over the years. Together with the first tranche of private capital, this is expected to bring the fund’s initial scale to MOP20 billion.

On fund supervision and transparency, the secretary for economy and finance will exercise macro-level oversight, while the Macau Investment Management Company, established in May this year, will serve as the fund’s management entity.

As a public enterprise, it must make appropriate disclosures in accordance with the public capital enterprise law, while the Legislative Assembly will also oversee the use of public funds through established mechanisms.

The fund will establish performance evaluation and fault-tolerance mechanisms in line with the “patient capital” principle, with investments primarily directed toward equity investments to support economic diversification. Liquidity funds, meanwhile, may be placed in safer products such as bank deposits or money market funds.

Meanwhile, concerns were raised over how the fund, starting with about MOP11 billion in initial capital, would achieve the Third Five-Year Plan targets of reaching a fund scale of MOP20 billion and raising non-gaming’s share of GDP to 60% by 2030.

Tam responded: “We have set a long-term goal and hope to achieve it step by step. The first step is to establish the fund, and we have already been in touch with many potential leading enterprises.”

He stressed that the fund operates on a long-term investment and patient capital philosophy. “By 2030, the fund may have completed its investment period, and we will evaluate its performance through third-party or internal assessments,” he said.