PRIVATE equity funds can play a role in innovating and developing the real economy and help create long-term capital, said the chairman of the Asset Management Association of China.
Hong Lei pointed out that innovation and development needs a multi-level capital market to bring about long-term capital because a huge amount of equity capital is essential as innovative development has risks. A multi-level capital market therefore helps equity capital to form while PE funds have a vital part in promoting long-term capital.
“Private equity funding is an important tool for the formation of long-term capital, which can serve to innovate and develop a real economy,” Hong said at the Shanghai International Private Equity Forum yesterday.
“For this purpose, we should encourage PE funds to participate in the National Equities Exchange and Quotations to stimulate market investment vitality. Tax incentives can also provide long-term funding for the formation of high-quality equity capital.”
By November, AMAC had registered 12,764 private equity and venture capital fund managers. There are 21,036 private equity investment funds with assets of 5.8 trillion yuan (US$880 billion) under management.