Beijing is Planning to Corroborate Scrutiny of Chinese Offshore Private Equity Funds
New plans for tight oversight of private equity funds set up outside of China by domestic companies – disclosure of investors identities included – in order to moderate the financial risk.
Lawyers and Private equity investors say that intensified security will hinder the flow of money from reinforcing global and Chinese investors to such offshore funds which raised billions of overseas projects.
Chinese private equity firms become more active in overseas deals and have been reinforcing their offshore fundraising abilities. In October it has reported by Reuters that Primavera Capital Group and CITIC Private Equity are planning to raise new dollar denominated funds around 5 billion USD.
Chinese companies had planned to set up private equity offshore funds projects as it will allow them a better fund for their investments. China’s Silk Road initiative known as the belt and Road program has been used as a plank for raising money from global investors outside China. The main purpose it the promotion of railways, electricity networks and infrastructure projects in Asia, Africa and Europe.
China Construction Bank and other big stated owned banks will raise billions of dollars for onshore and offshore investors to fund such projects. Senior Private Lawyer in Beijing said that the government would be reaching too far and making a challenge for Chinese funds to operate offshore, which should be great news for international funds.