“Asian Venture Capital Journal: Chinese LPs: Untapped potential” by Winnie Liu featuring Benjamin Wiley
Please click here to read the article on Asian Venture Capital Journal’s website: AVCJ
Still at an early stage of its development, China’s LP community has minimal exposure to offshore private equity. Institutions with big checkbooks aren’t necessarily the fastest movers
Benjamin Wiley, a partner at placement agent Sixpoint Partners…observes that more family offices are emerging out of China as the second generation takes over investment decision-making and professionalizes operations, bringing in third-party managers to construct and manage portfolios. This will likely heighten the appeal of high net worth individuals (HNWIs) to international private equity firms.
Whatever the long-term projections, the more immediate obstacle facing HNWIs is the same as that for institutional players: foreign exchange controls. The government is specially targeting outflows of hot money – driven by Chinese HNWIs – that is used to speculate on offshore assets, but those with clear investment purposes and detailed information disclosure, should still be able to get regulatory approval. It may just take longer than before.
“The Chinese LPs market is new and evolving quickly. You need professional staff in and of the market, the linguistic and cultural skills as well as a longevity in the market and an understanding of what’s really going on,” says Sixpoint’s Wiley. “You need to cultivate LP relationships, and keep up with changes in LPs’ staff and strategies.”
Sixpoint Partners, LLC, is a registered broker/dealer, member FINRA (http://www.finra.org) and SIPC (http://www.sipc.org). Sixpoint Partners Asia Limited is licensed by the Securities and Futures Commission (http://www.sfc.hk).