The Limited Partners Assocation of China (LPACN), has been founded to promote communication among Chinese and international limited partners. It has more than 20 members with assets north of $100 billion (€68 billion), who have committed capital to nearly 50 private equity and venture firms in China.
Its founding members are Vincent Huang, partner at Pantheon Ventures; Piau Voon Wang, partner at Adams Street Partners; Jason Zhang, managing director at Morgan Creek Capital; and Gavin Ni, Founder, chief executive officer and president of Zero2IPO Group, an integrated service provider for the Chinese private equity industry.
The group will commit itself to maintaining the interests of Chinese LPs and promote cooperation between them and international LPs through research, forums and exchange programmes, the Zero2IPO Group said in a statement.
Over the last decade, the private equity industry in China has taken rapid strides. While the way the industry is governed in the country is still opaque, the government has taken steps to create conditions conducive for the growth of the industry.
Currently, much of the institutional investor capital in China-focused funds is from overseas as there are not many domestic institutions that are permitted to invest in the asset class. However, the government is relaxing these regulations for domestic pension funds and securities firms. As such, Chinese institutional investors like social security funds will increasingly become a more important source of capital for Chinese funds, Zero2IPO Group said.
The creation of this LP association for China comes a few months after another LP association for China was launched – the China Limited Partners Association (CLPA). CLPA was established with the aim of increasing awareness about private equity among existing and potential limited partners. That association has among its members, 30 institutional investors from China and overseas. Members of CLPA include trusts, banks and government-linked agencies, Gary Xu, secretary-general and head of the association, told PEO in July.