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FastTrack to Private Equity investment in China

 

The PE sector has an important role to play in the post Coronavirus recovery, and nowhere is this role more important than in China, which is the first country to re-emerge after three months of economic hibernation and its first downturn in decades.

While most industries across the globe are busy responding to the immediate continuity challenges presented by the Coronavirus crisis, one sector is already mobilising to ensure it can play its part to support the recovery cycle.

Private Equity (PE) has an important role to play in the recovery, and nowhere is this role more important than in China, which is the first country to re-emerge after months of economic hibernation and its first downturn in decades.

Some portfolio companies have been impacted, valuations distorted, and some liquidity and redemption issues encountered. But, despite this, there is dry powder ready to deploy and opportunities to seize.

Some PE firms have already started to make their move.

FastTrack: to Private Equity investment in China has three main elements:

Tailored for each client’s specific requirements, we offer customised solutions across virtually every need a GP, LP, fund or portfolio company may have.

1 We can help form your fund

Fund formation:

We support the set-up of your end-to-end fund structure. Whether your fund is an offshore structure or an onshore Chinese limited Partnership or QLFP/QDLP, we are here to help.

2 We can take care of your fund’s administration

Fund administration:

Using our global fund accounting platform and other tech-enabled solutions, we can take care of investor onboarding, capital calls/distributions, fund accounting, NAV and investor statements, waterfall calculations, financial statements, regulatory reporting (FATCA, CRS) and other statutory reporting requirements depending on your domicile.

3 We can help keep you compliant with rules and regulations

Corporate Services:

We can administer the daily operations of your investment holding companies, fund entities, and portfolio companies – in China and other jurisdictions. We can also help you reduce risk, enhance efficiency and comply with rules, regulations and filling requirements. Services such as legal entity management, bookkeeping and accounting, HR & Payroll, office space, board meetings, liquidations and regulatory reporting are available and manageable via our proprietary IRIS technology platform.

We can manage your set-up in over 30 juristrictions whilst helping you stay compliant and on the tight side of rules, regulations and filing requirements.

What activity are we seeing?

Throughout the Coronavirus crisis, Intertrust Group has seen volumes pick up across Asia, particularly in China as private equity funds set up new investment structures. For example:

Support the set-up of an onshore Qualified Foreign Limited Partnership (QFLP) for a global asset manager investing into distressed debt and non-performing loan (NPL) opportunities in China.

Set up new investment structures for a Greater Bay Area focused real estate fund.

Incorporated substantial new structures for a series of real estate investments by a top US private equity firm.

As fund administrator, we helped successfully launch a new smart cities/real estate fund in Wuhan for an Asia-based investment management firm.

Case studies

As China’s financial sector has continued to open up to foreign capital, we have seen an increase in investment activity. Post COVID-19, we are now seeing further acceleration across a range of asset classes as private equity investors seek out attractive valuations and distressed opportunities. The following case studies provide examples of how Intertrust has moved quickly to support our clients in the current environment.

Case one – Global Distressed Debt Fund

With the opening up of China’s non-performing loan segment to foreign investors, Intertrust was brought in to assist the set-up and administration of a Qualified Foreign Limited Partnership (QFLP) Fund.

The solution

  • Support the establishment of onshore QFLP
  • RMB fund accounting & reporting
  • Onshore fund vehicle maintenance services, including book keeping, tax filing, treasury, custodian chops/certificates and annual compliance services
  • Set up and maintenance of joint venture vehicle and various legal entities across Hong Kong and the UK

Our advantages

  • Cross jurisdictional teams supporting the client across Europe, the UK, China and Hong Kong
  • Local knowledge to help guide our client through a complex local regulatory environment in China
  • Global service delivery standards to ensure our client’s investors receive same level of comfort for their onshore investments in China as they receive in other jurisdictions

Case two – US Private Equity Buyout Firm

We supported our client with its investment into a Chinese consumer goods company, providing a wide range of services solution across the entire deal lifecycle, from handling the formalities at deal closing to enhancing the operational efficiency of the acquired entity.

The solution

Deal structuring & closing

At the outset of the deal, the Intertrust Group team was brought into the process to set up a Hong Kong holding company, consolidate the existing entities of the target as well as working closely with their legal advisor to support the deal closing.

Post deal integration

  • Set-up of a new Hong Kong operating company to host four retail outlets and their employees
  • Performed health check on the past statutory records of the acquired entity and rectify them where applicable
  • Assisted the transition of the personnel from the acquired entity to the combined business

Ongoing operational efficiency

We also manage the back-office administrative activities of the new venture and offer comprehensive financial management and control solution including:

  • Accounting and reporting
  • Cash flow forecasting and treasury
  • HR and payroll management

What makes Intertrust Group different?

As the market readjusts, capital will need to be deployed quickly and legal entities set up swiftly. Furthermore, in a dynamic market, funds will need capable administrators to provide additional comfort to their investors. Incorporated in Hong Kong in 1976, today Intertrust has over 240 employees across Hong Kong, Shanghai, Beijing, Guangzhou and Shenzhen.

30 key financial markets around the world

Over USD460bn Assets Under Administration

3,500 experts, including fund administration specialists

Serving 80% of the top 50 PE International 300

The latest fund platform technology enabling a high degree of control and visibility 24/7

Wide multi-language capabilities

Deep offshore USD funds and onshore RMB fund experience

Our locations in China

Beijing

Guangzhou

Hong Kong

Shanghai

Shenzhen

How can you seize the opportunities and minimise the risks?

To find out more about how Intertrust Group can help FastTrack your opportunities in China, talk to our experts today.

Talk to our experts today

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