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在线翻译:
szdaily -> Markets
Offshore private equity funds face tighter scrutiny
    2018-January-30  08:53    Shenzhen Daily

CHINA plans to tighten oversight of private equity funds set up outside the country by domestic companies, including the disclosure of investors’ identities, to mitigate financial risk and keep tabs on a new wave of offshore fundraising, sources familiar with the matter said.

The intensified scrutiny, however, will likely stymie the flow of money from global and Chinese investors to such offshore funds, which have been raising billions for overseas projects, lawyers and private equity investors say.

The move comes amid a wider crackdown by China on debt-backed investments overseas, and opaque, shadow banking-linked wealth management products at home that have been repackaged for use in overseas funds.

Under the plan, the National Development and Reform Commission, or NDRC, the State planner, would act as the governing body of Chinese offshore private equity fundraising activities, the sources said.

Chinese private equity firms and other institutions would be required to disclose the identity of the true investors, or “limited partners” — to get beyond the shell entities many investors use — the ultimate source of capital and information about the fund managers, the sources said.

Banks and other financial firms would also need approval from the NDRC before setting up future overseas funds, the sources said.

“The new policy will treat offshore private equity funds as a ‘sensitive area’ and implement strict control over them,” said one of the sources, adding the current draft regulations are not finalized.

As Chinese private equity firms become more active in overseas dealmaking, they have been bolstering their offshore fundraising abilities. In October, Reuters reported Primavera Capital Group and CITIC Private Equity were planning to raise new dollar-denominated funds totalling around US$5 billion.

Some Chinese companies had been planning to set up project-based private equity funds offshore to better fund their overseas investments, according to people familiar with the companies’ plans.

Many funds have used China’s Silk Road initiative, also known as the Belt and Road program, as a plank for raising money from global investors outside the country. The goal is to spur railways, power grids and other infrastructure projects in central, western and southern Asia, as well as Africa and Europe.

Big State-owned banks, including China Construction Bank and Bank of China, aim to raise billions of dollars from onshore and offshore investors to fund such projects. (SD-Agencies)

 

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