In a sign of increased sophistication in mainland China’s nascent private equity sector, the country’s first fund to enter car services is set to launch next month, banking on strong growth in car-related operations such as rental, logistics and exhibitions.

The Shanghai Automotive Industry Fund aims to raise Rmb30bn ($4.6bn), launching operations with a first-phase investment of Rmb5bn. It says it hopes to close its first deals in August although it would not give details of the deals it is targeting.

The venture – a joint enterprise between the China Machinery Industry Federation and the government of Jiading district in Shanghai – is the first to seek mergers and acquisitions outside simple car production, focusing instead on the potential for car-related businesses as the country’s service sector develops. The fund also represents a growing diversification in private equity funding in China, which is seeking growth in the nation’s relatively primitive services sector.