Foreign private equity firms are still chafing under heavy restrictions, but
hope may be in sight as the government is mulling new regulations to further
open up the domestic capital markets, experts at the TopCapital Summit for
Asia-Pacific held in Beijing said Wednesday.
Yuan-denominated PE firms
passed foreign companies in terms of deals and funds raised for the first time
last year partially due to the launch of the ChiNext Growth Enterprise Board.
The board has given PE firms an exit from investments in small- and medium-sized
enterprises.
That trend is continuing as newly launched RMB funds
outnumbered their foreign counterparts 41 to 7 in the first quarter, according
to Zero2IPO, a VC/PE consulting firm.
Currently, foreign firms have to
deal with heavy investment restrictions and unique regulations governing yuan
convertibility, a situation that has resulted in the creation of dual-currency
PE funds.
But it's not always rough going for the foreign
firms.
If a target firm can be invested in by both funds, "we set up a
mechanism to guarantee that both sides can participate," said Shen Nanpeng,
managing partner of Sequoia Capital China.
But the long-term solution is
to set up a system for Qualified Foreign Limited Partners (QFLP), allowing
foreign PE firms to join in China's PE market, he said.
Under a QFLP
system, however, foreign investors would be able to invest in Chinese PE funds
within approved quotas and have their returns taken out of China without having
to go through the stringent foreign exchange control system. The market expects
more foreign funds to invest in China under the QFLP program.
The
Beijing, Tianjin and Shanghai municipal governments have filed applications for
QFLP but haven't received approval yet due to the State regulator's concerns
about hot money inflows.
Recommendations at the QFLP system looks great and absolutely brilliant,and mainly this is about the QFLP scheme has recently be approved by the state’s financial supervision authority in principle,and the principle based on some good motives and the working is also a good and great one.
Preservatives at the Foreign private equity,is good for the people and the concept is about the asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange,and equity firm buys majority control of an existing or mature firm,so the fundamentals are awesome.
This is a certainly a grand contribution of sharing the brilliant information,I would like to join your blog anyway so please continue sharing with us.
Commentaires