Oversea-Chinese Banking Corporation (OCBC Bank) has launched a US$100 million private equity fund under the Shanghai Qualified Foreign Limited Partner (QFLP) Pilot Programme.
The launch is aimed at facilitating the bank’s direct investments in onshore domestic Chinese companies as it aims to increase its exposure to private equity assets in China over the next five years.
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The fund OCBC Capital (Shanghai) Equity Investment Fund is set up under the provisions of a licence obtained from the Shanghai QFLP Pilot Programme.
The fund eliminates the need for extensive regulatory approval processes and mitigates the issue of foreign capital convertability typically faced by offshore private equity funds investing into onshore Chinese companies, the bank said in a statement.
The fund allows OCBC Bank to convert up to US$100 million worth of foreign denominated capital into Renminbi to make multiple investments into domestic Chinese companies directly.
The fund will be managed by the newly established fund manager, OCBC Capital (Shanghai) Equity Investment Management Co. Ltd.
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By GlobalDataIt is expected to invest in Privately-Owned Enterprises (POEs) in the growth stages with the intention of eventually listing these companies on the China’s A-shares market.
