Hereford funds launched the Bin Yuan China Innovation Fund as a Luxembourg UCITS on 2nd February 2026, providing global investors access to China's AI deployment ecosystem—the second major profit pool in the global artificial intelligence revolution. The fund targets early-cycle technology leaders in semiconductors, AI infrastructure, advanced manufacturing, enterprise software, and new-energy mobility.
“The only way for China to maintain its global manufacturing competitiveness and boost domestic economic growth is to advance its technological capabilities. AI is an important driving force in achieving this goal. China will see the emergence of many globally leading technology companies. “ said Ping Zhou, Chairman & CIO of Bin Yuan Capital.As AI moves from innovation to application and commercialization, China holds structural advantages in energy availability, manufacturing depth, supply-chain integration, and cost-efficient scaling. The country produces 38% of global STEM graduates, leads in AI patent applications with 39% of the global total, and offers AI model token prices at approximately one-eighth of U.S. equivalents. These strengths position China to play a central role as AI adoption accelerates across the real economy.
The China Innovation strategy employs a concentrated, all-cap approach with a SMID-cap bias (71% allocation), targeting approximately 25 holdings. The portfolio focuses on under-researched companies where limited analyst coverage and low foreign ownership create opportunities for active managers. Approximately 32% of holdings remain uncovered by major brokers, representing early-stage leaders before they become index-relevant.
Bin Yuan Capital operates as a locally based, onshore Chinese manager combining genuine market access with institutional-quality governance. The firm's investment team includes former GE engineers, manufacturing specialists, and applied technology experts, supporting detailed value-chain analysis and early identification of bottleneck technologies. As an early UNPRI signatory among onshore managers, Bin Yuan has embedded sustainability considerations into its investment process.
Global investors currently maintain minimal exposure to China's SMID-cap technology universe, despite the country’s leadership in AI patents and talent pool, plus its strong footing in AI deployment infrastructure. The fund addresses this positioning gap, offering a focused satellite allocation that complements existing large-cap, U.S.-oriented AI exposures.
