(April 25, 2012, Weil News)
John Fadely, head of the Asia Private Funds practice at Weil, Gothsal & Manges, was quoted at length on the potential impact of changes facing private equity funds in China, notably increased difficulties in raising funds and the prospect of tougher regulations, in an article in the April 2012 issue of Asian Legal Business
. Fadely noted that there is an increasing outbound investment trend. “As China continues to climb up the value chain over time, it wouldn’t be surprising at all for China’s outbound investment activity to diversify into other industries,” he added. He also discussed fundamental ways in which RMB funds differ from the typical PE fund, especially the requirement that capital contributions be made at the very beginning of the fund in order to eliminate the possibility of default risk later on. As to the possibility of tougher regulations of Chinese PE funds, Fadely said, “China’s PE industry has come a long way over the past few years through regulatory and tax competition at the local level. But now, the NDRC appears to be emerging as the key central government regulator of the industry, which might mark the beginning of a new regulatory phase.”
Read the full article, entitled "PE Funds,"
from the April 2012 issue of Asian Legal Business