Rise Of Trillion-RMB Government Funds Reshapes Chi
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Posted On: 02/06/2017 6:16:43 AM
Rise Of Trillion-RMB Government Funds Reshapes China's Investment Landscape
Therefore, most government guidance funds do not conduct performance assessment . A small number of funds do simple book value assessments of their investment portfolios, but no one is named to be accountable for performance.
So far, no successful exits from any government guidance funds in China has been recorded.
They could, however, potentially accelerate China's transition to an innovative economy.
At their heart, China's government guidance funds are tools for the country's governments to maximize the impact of government fiscal spending, utilizing one centuries-old principle: leverage.
Eventually, the fund cluster will again establish a group of subsidiary funds or participate in direct investments to move around RMB1 trillion (US$144 billion) in total capital to support the development of strategic industries, a 25-time leverage.
Another critical risk factor is the source of the third-party capital now joining these government guidance funds. Often, they are from state-owned enterprises, insurance companies and private investment firms.
Increasingly, banks are participating as loan providers to portfolio companies and buying stakes in these funds as limited partners, in what is called "interactive equity-loan investment deals."
https://www.chinamoneynetwork.com/2017/01/13/...andscape/2
.....problem w/mega merge leverage via piggy-backing is dead weight carried and difference between long term and short term goals,.....a recipe for potential disaster down the road imo.
The Good thing is that; It sounds like Funds Will Be Available going forward to accomplish China's Goals wrt Quantum Materials
Let The FLOW GO
QDX
Therefore, most government guidance funds do not conduct performance assessment . A small number of funds do simple book value assessments of their investment portfolios, but no one is named to be accountable for performance.
So far, no successful exits from any government guidance funds in China has been recorded.
They could, however, potentially accelerate China's transition to an innovative economy.
At their heart, China's government guidance funds are tools for the country's governments to maximize the impact of government fiscal spending, utilizing one centuries-old principle: leverage.
Eventually, the fund cluster will again establish a group of subsidiary funds or participate in direct investments to move around RMB1 trillion (US$144 billion) in total capital to support the development of strategic industries, a 25-time leverage.
Another critical risk factor is the source of the third-party capital now joining these government guidance funds. Often, they are from state-owned enterprises, insurance companies and private investment firms.
Increasingly, banks are participating as loan providers to portfolio companies and buying stakes in these funds as limited partners, in what is called "interactive equity-loan investment deals."
https://www.chinamoneynetwork.com/2017/01/13/...andscape/2
.....problem w/mega merge leverage via piggy-backing is dead weight carried and difference between long term and short term goals,.....a recipe for potential disaster down the road imo.
The Good thing is that; It sounds like Funds Will Be Available going forward to accomplish China's Goals wrt Quantum Materials
Let The FLOW GO
QDX
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