A few days ago, the China Securities Regulatory Commission announced that it agreed in principle to launch the first pilot project of private equity venture capital fund distributing shares to investors in kind, and the pilot object was Shanghai Linli Investment Partnership (Limited Partnership).
Shanghai Linli will fulfill the corresponding procedures and information disclosure obligations in accordance with the relevant laws and regulations and the requirements of the China Securities Regulatory Commission on the pilot placement of shares in kind by private equity funds, and issue shares to investors in a timely manner.
Other qualified private equity venture capital funds are also actively and orderly promoting the pilot application for physical stock issuance.
Private equity venture capital fund distributes physical shares to investors, which means that the private equity fund manager and investors agree to directly distribute the shares of listed companies held by private equity venture capital fund before IPO (initial public offering) to investors (shareholders) through non-transaction transfer.
In overseas markets, it is a common institutional arrangement for private equity funds to distribute shares to investors in kind after listing companies. But before that, all enterprises invested by China Private Equity Venture Capital Fund should reduce their holdings in order to distribute the principal and income to LP (Limited Partner).
In order to broaden the exit channels of private equity venture capital funds, promote the virtuous circle of investment-exit-reinvestment, and smooth the impact of private equity venture capital fund withdrawal on the secondary market, in July this year, the CSRC launched a pilot project of private equity venture capital funds distributing shares to investors in kind.
The CSRC recently said that since the pilot was launched, industry organizations have responded positively. According to industry organizations, the distribution of shares by private equity venture capital funds to investors in kind is conducive to taking into account the differentiated reduction needs of investors, avoiding market fluctuations caused by centralized reduction, enriching the exit channels of private equity venture capital funds, further optimizing the exit environment of private equity venture capital funds and promoting the long-term healthy development of the industry.
In addition, the CSRC also stated that it will promote the pilot work of physical allotment of private equity venture capital funds in an orderly manner, summarize and evaluate the pilot situation in a timely manner, and gradually expand the scope of the pilot.
According to the data of fund industry association, as of the end of August this year, there were 1.47 million private equity and venture capital fund managers; There are 49,200 private equity investment funds and venture capital funds, with a total survival scale of 13.69 trillion yuan.