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There is everything you want to know about industrial funds! _ Investment

Release Time:2021-07-21 Topic:Five methods for fund selection Reading:11 Navigation:Stock Liao information > Technology > VCs > There is everything you want to know about industrial funds! _ Investment phone-reading

(2) The fund property is managed by the private equity fund manager;

(3) The investment target is mainly the equity of unlisted companies;

(4) Focus on specific industries as the main investment direction.

Industrial funds can actually be understood as private equity investment funds.

The distinction between several common concepts

In daily life, we can often meet others The name of private equity funds, such as mergers and acquisitions funds, government-owned assets industry investment funds, etc. In fact, these concepts and industrial funds are related to each other and overlap in scope, but the classification dimensions are different. Sometimes a private equity fund can be called several ways.

[Private Equity Investment Funds, M&A Funds] This group of concepts classifies private equity funds in terms of investment targets and operation methods. These two concepts often overlap with industrial funds. For example, a listed company initiated the establishment of a private equity fund to specifically conduct industrial mergers and acquisitions in a certain industry. When the time is ripe, the private equity fund will be used. At this time, this fund is a private equity fund, we can also call it an industrial fund or an M&A fund. [Government-funded asset industry investment funds, government-funded funds] This is classified according to the source of funding. These two concepts are private equity funds defined and supervised by the Development and Reform Commission and the Ministry of Finance. The scope of the two is highly overlapped, and the main characteristics are funds. The source of funding is government funding. It is also highly closely related to the industrial fund industry, but it cannot be directly equated.

Second, the regulatory framework of industrial funds

Currently, industrial funds are facing multiple regulatory issues.

The industry fund is essentially a private equity investment fund, so in terms of supervision, it must of course be supervised by the China Securities Regulatory Commission and the China Foundation Association, and must go to the China Foundation Association for registration and filing. formalities.

In addition, if the source of funds for the industry fund, in addition to the supervision of the CSRC system, it will also be supervised by the National Development and Reform Commission and the Ministry of Finance.

Definition comparison of ministries and commissions and main differences

Venture Capital/Private Equity Investment Fund

Government-provided asset industry Investment funds

Government investment funds

Department Securities Regulatory Commission/China Foundation Association Development and Reform Commissionspan> Ministry of Finance

legal basis span> "Interim Measures for the Supervision and Management of Private Investment Funds" "Interim Measures for the Administration of Government Assets Industry Investment Funds" "Interim Measures for the Administration of Government Investment Funds"

Release time 2014-8-21 2016-12-30 2015-11-12

Definition Private equity investment funds are Refers to an investment fund established within the territory of the People's Republic of China to raise funds from investors in a non-public manner. (

Private equity, venture capital/private equity investment funds, other funds, asset allocation funds ) The term “government-provided asset industry investment funds” mentioned in these Measures refers to

government-funded, Equity investment funds and venture capital funds that mainly invest in non-publicly traded corporate equity. is established by

all levels of government through budget arrangements, with independent funding or joint funding with social capital, adopt market-oriented methods such as equity investment to guide social capital to invest in key areas and weak links of economic and social development, and to support funds for the development of related industries and fields.

Main differences Registration Filing (Ambers system); Debt investment and real debt of famous stocks are strictly restricted. Custody is not mandatory Record filing system; investment in a single enterprise shall not exceed 20% of the fund’s total assets; custody is required; behaviors that increase local government debts such as clear stock real debt are not allowed. There is no registration requirement; it is prohibited to provide loans and fund lending to third parties.

Through comparison, it can be found that the concept of "private equity funds" of the China Securities Regulatory Commission is the broadest, including all non-publicly issued funds, while the rules of the National Development and Reform Commission and the Ministry of Finance, Only for government-funded/investment equity investment funds.

In summary, the application of regulatory rules for industrial funds requires specific analysis. First, it should be recognized as private equity investment funds, which should comply with the regulatory requirements of the China Securities Regulatory Commission and the self-discipline of the Fund Industry Association Rules; if there is government funding, it should also be subject to the supervision of the Development and Reform Commission and the Ministry of Finance.

In addition, if local government departments issue regulatory rules on industrial funds, they should also comply with such local government regulations. For example, in May 2015, Zhejiang Province issued the "Guiding Opinions of Zhejiang Provincial Department of Finance on Regulating the Operation and Management of Government Industrial Funds" (Zhe Caiqi [2015] No. 70)

3. The basic points of industrial funds

The basic points of industrial funds

initiator Mainly local governments, listed companies, PE institutions

participating institutions local governments, financial institutions (banks, insurance, etc.), enterprises

organizational form Limited partnership, company, contract

management method Professional private equity fund manager management

Raising Method Issuance in the form of private placement to raise qualified investors

Structural arrangement Flat-layer, hierarchical

Investment method Equity investment is the main form, and the debt investment method is auxiliary (shares + debt); The real debts of public stocks are strictly restricted, and it is not allowed to lend to enterprises through entrusted loans.

Investment field Infrastructure, Technology, environmental protection, medicine, cultural tourism and other industries

Exit method Mergers and acquisitions, IPOs, maturity liquidation, etc.

We focus on the analysis of the three organizational forms of industrial funds, and the relevant comparisons are shown in the figure below:

Type

contractual

partnership

company type

legal basis strong> "Interim Measures for the Supervision and Administration of Private Investment Funds", "Contract Law" "Private Investment Funds Supervision and Administration" Interim Measures, Partnership Enterprise Law Interim Measures for the Supervision and Administration of Private Equity Investment Funds, Company Law

Number limitspan> Investors must not exceed 200 Partners must not exceed 50 Limited liability The company must not exceed 50 people

Setup Procedure Fund The manager and the investor sign a fund contract, and the fund will be established. Sign a partnership agreement, go through business registration and obtain a business license Sign the articles of incorporation, investor agreement, go through business registration and obtain business license

internal governance The fund manager is responsible for fund investment operations, and investors exercise voting rights on major issues through the fund unit holder meeting by the fund manager /The general partner is responsible for the investment operation and daily management of the fund. The limited partner does not execute partnership affairs and exercises the right to vote on major matters through the partner meeting. The shareholder meeting is the highest authority , The board of directors is elected by the shareholders meeting and exercises the investment management authority of the fund. Investors exercise voting rights on major issues through the shareholders’ meeting

taxation At present, it is generally believed that the fund itself does not pay income tax, nor does it have the obligation to withhold and pay personal income tax. Investors should declare tax on their own. The fund itself does not pay income tax, but the fund The manager shall withhold and pay individual income tax for individual investors The fund itself shall pay corporate income tax, and the fund shall withhold and pay income tax for individual investors

In practice, the most common organizational form of industrial funds is the partnership type. The contract type is also relatively common at present, and the company type is the least common. However, some large industrial funds, especially government-led funds with specific purposes, have relatively high requirements on governance structure and risk prevention, so they will require a corporate system. For example, the "Railway Development Fund Management Measures" clearly requires: China As the representative of the government funder and the main sponsor of the railway development fund, the Railway Corporation actively attracts social investors and jointly initiates the establishment of the China Railway Development Fund Co., Ltd. through agreements and commitments in accordance with the "Company Law".

IV. Case: Cooperation between listed companies and industrial funds

According to the announcement of the listed company, we organize the structure of the fund as follows:

This is a typical model of cooperation between listed companies and industrial funds. The listed company contributes part of the capital, and then

uses industrial funds to raise funds and carry out financing for companies in the target industry. For acquisition, the target company is first cultivated "outside the body". When the time is right, the listed company acquires the target company from the industrial fund, and the industrial fund exits.

The most noteworthy thing in this case is the structural arrangement of industrial funds. Although the announcement of the listed company did not make it clear that this is a structured fund, from the perspective of income distribution arrangements, this industrial fund is a de facto tiered product.

In this fund, the LP PICC party has the right to pre-distribute the income. Regardless of whether the fund has a project or not, PICC party can distribute the pre-revenue every six months; in addition, the PICC party and Listed companies will also redistribute the cash distributed from the fund, giving priority to ensuring that the PICC party realizes the expected returns, while the excess returns will be enjoyed by the listed company. This arrangement is essentiallyThe city company is limited to the capital contribution to the fund, and the capital and income of the PICC party are bottomed out. The PICC party is the priority LP, and the listed company is the inferior LP.

5. The application and impact of recent new regulations on industry funds

p>

1,

Application of new asset management regulations

In accordance with the provisions of the new asset management regulations and answering questions from reporters, private equity funds shall be applicable in accordance with the following rules:

1. Private equity investment funds shall be subject to special laws and administrative regulations for private equity investment funds; /span>

2. Private equity investment funds shall apply to private equity investment funds where there is no provision in the special laws and administrative regulations for private equity investment funds, the "Opinions" shall apply;

3. The relevant regulations for venture capital funds and government-owned asset industry investment funds shall be formulated separately.

Except as otherwise provided in the Securities Law and the Private Equity Regulations (currently in the consultation process), private equity shall be subject to the "Guiding Opinions" as the standard, but innovation Investment funds and government-owned assets industry investment funds are not applicable.

2. Influence

1. Multi-level nesting

At present, a large part of the funds of industrial funds comes from asset management products such as bank wealth management. Due to regulatory rules and bank internal risk control restrictions, wealth management funds generally need to be embedded in an asset management plan when investing in industrial funds. , There are often two levels of nesting.

According to the requirements of the new asset management regulations, only one level of nesting between asset management products is allowed. The existence of layer nesting can not be carried out, which has a great impact on the source of funds for industry funds.

2. Maturity mismatch is prohibited

This new asset management regulation requires the standardization of capital pools and allows standardized assets to exist for periods Mismatch, but for non-standard assets, there is still no maturity mismatch, and it is clear that "the termination date of non-standardized debt assets shall not be later than the expiry date of closed asset management products or the latest open day of open asset management products" , Which means that the previous practice of banks or trusts that used open products to circumvent the prohibition of maturity mismatch has been suspended.

Previously, when bank wealth management invested in private equity funds through asset management plans, wealth management funds were often shorter than the term of the underlying assets (equity) and were connected through rolling issuance. From the perspective of this model, there are problems of maturity mismatch and separate pricing, and it is suspected of capital pool operation.

In addition, for equity investment in private equity funds, investment in unlisted equity can only be investment in closed-end asset management products, and the exit date shall not be later than the expiration of closed-end asset management products day. At present, private equity investment funds are mainly in the form of limited partnership organization, and the period of LP fund raising is mainly 7 years (5+2). The investment equity project will not really clarify the repurchase or other exit arrangements when the fund is raised. , Which makes it difficult to match the funding period with the project.

3. New financial management regulations: In the future, financial management subsidiaries can cooperate with private equity funds

In September 2018, the China Banking and Insurance Regulatory Commission officially issued the "Measures for the Supervision and Administration of Commercial Bank Wealth Management Services" and answered questions from reporters. It is worth noting that regarding the cooperation between private equity funds as non-licensed financial institutions and bank financial management, the official draft follows the requirements of the draft for comments, that is, it is not allowed in principle. However, in response to reporters’ questions, the regulatory authorities made it clear that in the bank’s wealth management subsidiary measures to be released in the future, it will allow the wealth management issued by the wealth management subsidiary to cooperate with private equity funds that comply with laws and regulations and meet the conditions.

Subsequently, in October 2018, the China Banking and Insurance Regulatory Commission issued the "Administrative Measures for Wealth Management Subsidiaries of Commercial Banks" (Draft for Solicitation of Opinions), which regulates the establishment and business development of wealth management subsidiaries of commercial banks, and clarifies that theCooperation with private equity funds.

This also means that the current stagnant financial investment industry The fund model is expected to be restarted after the establishment and operation of the wealth management subsidiary in the future.

Under this new situation, where will industry funds go in the future? How should wealth management subsidiaries cooperate with industry funds? With strict restrictions on local debt, is there any way out for the real debt business of industrial funds? In addition, what new models and trends does industry funds have? ?

In response to these practical issues, the "

Industry Fund and Guidance Fund operation practice and financial institution participation case analysis

One by one strong>

Give the answer

Case! !

Welcome to banks, brokerages, insurance and other financial institutions, private equity funds, government guidance funds and M&A funds, government platform companies, infrastructure companies, Practitioners from law firms, accounting firms, etc. sign up to participate in the conference. Two industry experts will have face-to-face exchanges with you. Industry funds you want to know, we have them here!

Course Outline

Topic 1: Under the new asset management policy, government-provided asset industry funds and guiding fund structure design, investment operation risk control practical points and case analysis

(December 22, Teacher A)

1. The legal application of private equity funds after the implementation of the new asset management regulations

1 , The supervision history of private equity funds and the current supervision system;

2. Discussion on the upper law of the asset management industry

2. The practice of guiding the choice of the fund itself and the organizational form of the sub-funds under the new asset management policy

1. Comparison of corporate system, limited partnership, and contractual funds And application

2. Combination, embedding and penetration of the three fund forms

3. Parent-child fund structure design Key points---Take PPP industry funds as an example

4. The dual GP structure of limited partnership funds

5. The dual-manager structure of contractual funds

6. The choice of internal governance structure of private equity funds

III. The establishment, filing/registration of industrial funds funded by the government under multiple regulatory systems

1. Multiple regulatory systems for government guidance/funded funds (Ministry of Finance, Development and Reform Commission, The formation of the China Securities Regulatory Commission)

2. "Guiding Opinions on the Standardized Establishment and Operation of Venture Capital Guiding Funds", "Interim Measures for the Administration of Government Investment Funds", "Government-provided Assets Industry Investment" Comparative interpretation of the Interim Measures for Fund Management

3. Filing and registration procedures and precautions for government-funded funds under multiple regulatory systems

4. Models, characteristics and problems of guidance funds and industrial funds led and participated by different entities

1. Government-led guidance funds and industries Investment funds

2. Industry guidance funds and industrial investment funds led by listed companies

3. Industry guidance funds and industrial investment funds participated by commercial banks

4. Industrial investment funds led by private equity investment fund managers (with the intervention of guiding funds)

5. PPP industrial funds with insurance capital participation span>

V. State-owned enterprise background as a limited partnership industrial investment fund GP and the transfer of state-owned shares

1. The different identification standards of the Administration for Industry and Commerce, the Development and Reform Commission, the Securities Regulatory Commission and other related institutions and the different definitions of state-owned enterprises in the latest "Measures for the Supervision and Administration of Enterprise State-owned Assets Transactions"

2. The "Partnership Law" and the filing requirements of the Fund Industry Association for state-owned enterprises to serve as GPs

3. Practice cases of industrial investment funds with state-owned assets as GPs under standard conflicts

4. Discussion on the "safe" model of state-owned enterprises as GP under the conflict of standards

5. Industry (guidance) fund The transfer of state-owned shares in China

VI. The operation and reporting strategy of government guidance funds (funds of funds)-a case of a government guidance fund in Hubei Province

1. Common problems of government guidance funds and their differences from FOF

2. Common transaction structures of government guidance funds and General requirements and risk control measures for sub-funds

3. General standards and risk control measures for government-guided funds to select private equity fund management institutions

4. The main points of due diligence and risk analysis of government guidance funds on the proposed private equity fund management institutions

5. Government guidance funds and private equity management institutions Key points of fund contract negotiation: investment area restrictions, investment ratio restrictions, industry restrictions, income distribution, management fees, governance structure, key person clauses, etc.

7. Government and Analysis of key points in the investment operation of industry guidance funds

1. "Penetrating" supervision faced by industry investment funds in asset restructuring and private placement p>

2, shares Analysis of the core terms of investment rights: gambling, compulsory sales, joint sales, convertible bonds, etc.

3. Analysis of non-standard debt investment methods: entrusted loans, trust loans, name Stock real debt, non-financial enterprise lending, convertible bonds, alternative gambling

8. Q&A and communication

Topic 2: Financial Institutions’ Participation in Industrial Fund Business Channels and Case Analysis in the New Situation

(December 23, Teacher B)

I. Overview of the current financial regulatory situation and industrial fund business

1 , Strict supervision: Review of financial regulatory policies since 2018 (new regulations on asset management, new regulations on entrusted loans, new regulations on financial management)

2. Deleveraging: Ministry of Finance No. 23 And the central government’s requirements for local governments to resolve hidden debts

3. Policy reversal? : The Political Bureau Work Conference of the Central Committee and Infrastructural Improvements to Make Up for Shortcomings

4. Historical Review: Overview of Industrial Fund Business and Regulatory Policy Impact

2. The main ways for financial institutions to participate in industrial fund business under the new situation

1. Common industrial fund organizational structure and management requirements

(1) Establish contractual funds through financial institution asset management products

(2) Establish contractual funds through private equity fund managers span>

(3) Establishment of a limited partnership enterprise

(4) Establishment of a corporate fund

(5) Does the fund industry association's requirements for private equity funds apply to industrial funds? (Record registration, dual managers, no investment in debt assets, etc.)

(6) Management requirements of the National Development and Reform Commission and the Ministry of Finance on government industry funds

2. The main issues and channels for financial institutions to participate in industrial funds under the new situation

(1) Question 1: New asset management regulations have implications for industrial funds What are the effects? (Multi-layer nesting, hierarchical design)

(2) Question 2: Does the new bancassurance financial management regulations restrict banks from cooperating with private equity funds?

(3) Path 1: Build a trust-based contractual fund instead of a partnership fund

(4) Path 2: The fund share income right model replaces the direct investment model

3. The industrial fund stock rectification and new fundraising in the context of the resolution of hidden debts by the local government

(1) Classification and definition of hidden debts of local governments

(2) Difficulties and main problems in the rectification of the existing industrial fund business

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(3) The main fundraising methods and existing problems of the new industrial fund business

(4) Various types since 2018 Equity fund raising situation and main sources of funds

3. Main problems and solutions for commercial banks participating in industrial funds under the new situation

1. Several major issues that hinder banks from developing industrial fund business

(1) Self-owned funds and credit funds are not allowed to participate in equity investment

(2) After the new asset management regulations, it is more difficult to raise long-term wealth management funds

(3) Bank and government industry funds Hidden debts for local governments

(4) The downturn in the capital market affects listed company-type industry funds to raise funds

2. Solutions for commercial banks to participate in industrial funds

(1) Vigorously develop wealth management business to attract medium and long-term funds

(2) Improve the liquidity of assets to solve the exit problem

(3) Change the early participation into inventory activation and fund custody

(4) Increase cooperation with financial asset management companies to jointly develop debt-to-equity funds

(5) Provide a reasonable basis for the participation of self-owned funds

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IV. Case analysis of financial institutions participating in industrial funds under the new situation

1. Approved by a bank Investment-loan linkage mode (flow loan + stock option) and venture capital fund cooperation case

2. An equity investment management company pledged its fund shares to a bank for pledge financing case analysis

3 , A local government industry guidance fund raises funds through financial institutions’ agency sales of products to participate in the mergers and acquisitions of listed companies

4. A financial asset management company initiates the establishment of a debt-to-equity swap fund to attract banks’ wealth management Fund participation

Course details

Time : December 22-23, 2018 (Saturday and Sunday)

location: Shanghai (notice one week before the specific location)

course fees :3800 yuan/person (including course fee, material fee and lunch fee, excluding travel and accommodation expenses), a discount of 300 yuan per person for groups of three or more.

Please complete the payment before the course starts. Please contact the staff for the payment account and invoice.

Course Outline

How to sign up

Contact person for registration: Teacher Li 135 2423 2434 (Tel & WeChat)

Class

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