In the last issue of IFLR, staff writer Tom Young
demonstrated why more and more private equity houses are
establishing funds onshore for Chinese investments. In a
follow-up piece, here are tips on how to set one up
This year testifies to feverish interest in the Chinese
venture capital community in something called an renminbi fund.
But what is a renminbi fund and what are the key issues that a
foreign sponsor needs to take into consideration when forming
and structuring one?
Renminbi funds may be broadly construed to include any legal
entity formed under PRC laws that purports to make
renminbi-denominated private equity investments in China.
Private equity funds have been established in various legal
forms in China including trusts, limited liability companies
and limited partnerships (only recently made available to
domestic sponsors). Certain alternatives have also been used
including investment management agreements (for a start-up
sponsor with a...