New roads open for PE – but still a bumpy ride
Doors are opening up for private equity (PE) investors, with Shanghai launching a new programme recently that addresses foreign exchange concerns and allows qualified foreign-invested funds to enter the market. However, for PE players, fundamental challenges remain
Issue: February 2011
Keywords (click to search):
Minter Ellison
private equity
challenges
QFLP
With the relative decline of leveraged buy-out activity in developed markets, private equity firms have increasingly turned their focus to China in the last few years. In tandem, Chinese government authorities have encouraged private equity investment in the country by enacting several new regulations.
Most recently, the Shanghai Municipal Government announced the establishment of a pilot project permitting foreign private equity funds in Shanghai to more freely use foreign currency funds for domestic investment. The Shanghai Finance Bureau, Shanghai Financial Service Office (Shanghai FSO), Shanghai Municipal Commission of Commerce (Shanghai Mofcom) and Shanghai Administration for Industry and Commerce (Shanghai AIC) issued the Implementing Measures for the Launch of a Pilot Foreign-invested Equity Investment Enterprise Project in the Municipality (上海市关于本市开展外商投资股权投资企业试点工作的实施办法) (Measures) on 24 December 2010. The Measures take effect 30 days after issuance.
Notwithstanding the introduction of the pilot scheme, known as the Qualified Foreign Limited Partner (QFLP) project, the...
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