Fund aims for Chinese entities to list at home
Print Edition
SHENGJING, a Chinese investment advisor and manager, has launched the country’s first investment fund dedicated to helping overseas-listed Chinese firms to delist and list instead on domestic stock markets, the China Securities Journal said yesterday.
The 2 billion yuan (US$323 million) fund of funds (FoF) aims to bring home Chinese companies which currently have so-called variable interest entity structures, and are partially held by US dollar funds, the newspaper said.
VIE structures have been widely used by Chinese technology companies, in particularly Alibaba, Baidu and Tencent.
Because foreign ownership in China’s Internet sector is blocked, and Chinese Internet startups have difficulty meeting profitability requirements to list onshore, the VIE structure was developed to satisfy the ownership requirements of overseas securities regulators without technically breaking Chinese law.
The FoF will invest in about 10 funds with that purpose, which could eventually see at least 10 billion yuan of funds at work to bring over 100 overseas listed companies home, the newspaper said.
China’s startup board ChiNext has attracted huge investor interest, with valuation of companies listed there soaring.
But trading in many overseas-listed Chinese companies is generally lukewarm, partly due to some offshore investors’ distrust of such entities.
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