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in the first month of implementation of the new private equity regulations, the number of new private equity products filed dropped sharply.

according to data from the china securities investment fund association, as of august 28, only 91 private equity funds had completed filing this month, less than 100, setting a record low for a single month since private equity filing. in july, a total of 603 private equity funds completed filing, a month-on-month decrease of more than 80%.

an industry insider told the reporter that the recent difficulty in registering private equity products is mainly due to the fact that in the early stage of implementation of the "guidelines for the operation of private securities investment funds", many managers and custodians had different understandings of product registration and did not meet the requirements of the new regulations. they frequently received feedback from the association, resulting in low efficiency in registration approval.

in addition, due to the recent market adjustment, the fundraising of private equity funds has been cold, which is also one of the reasons for the decline in the number of new product filings. in the context of poor market performance, private equity funds generally remain cautious and dare not easily increase their positions. private equity funds unanimously believe that the current bottoming characteristics are obvious, but policy catalysis is still needed.

the number of new product filings has dropped sharply

the "operation guidelines for private securities investment funds" were officially implemented on august 1. the "operation guidelines" have a total of 42 articles, covering all aspects of private securities funds, including fundraising, investment, and operation.

affected by the implementation of the new regulations, the number of private equity products registered has dropped sharply since august.

according to data from the china securities investment fund association, as of august 28, a total of 377 products have been filed by private equity funds this month. last month, a total of 997 products were filed. among them, the number of private equity securities funds was only 91, less than 100, setting a record low for a single month since private equity filing. in july, a total of 603 private equity securities funds completed filing, a month-on-month decrease of more than 80%.

china securities journal reporters have found that the filing speed of private securities products has significantly accelerated recently compared with the beginning of the month. in early august, only 8 products completed filing; in mid-august, 32 products completed filing; since the end of august, 51 products have completed filing. there are still 3 working days left in august. according to the current filing pace, the number of products will eventually exceed 100 this month, but it is still a cliff-like drop compared with last month.

the head of a quantitative private equity firm in shanghai told reporters that it is normal for the new regulations to be implemented in the early stages, as the association treats all private equity firms equally. the pressure on the custody side is huge. "the custody side needs to update the contract templates in the near future to ensure the operation and compliance of the managers. in combination with the new regulations, the business processes need to be reorganized. the industry as a whole is also adapting."

some industry insiders also said that many managers and custodians have different understandings of product filing, which makes the product contracts fail to meet the requirements of the new regulations. they frequently receive feedback from the association, resulting in low efficiency in filing. recently, the overall filing pace has accelerated and will gradually return to normal starting next month.

according to the reporter, the feedback received from the association on some products mainly focused on aspects such as postponement of the opening date, lock-up period, definition of liquidity-restricted assets, position building period, overly broad investment range, and authorization to provide valuation information.

for example, regarding the postponement of the opening day, the association’s feedback is that the opening day shall not be postponed, otherwise it will result in two openings a week. please make corrections. regarding the position building period, the association’s feedback is that the product type of the operating guidelines should be calculated based on “invested assets” and a separate position building period should not be set.

yu weiqian, senior partner of beijing kangda (guangzhou) law firm, said that the registration speed of private equity funds has been slow recently. on the one hand, they have to meet various requirements of the new regulations, and at the same time, the threshold for product registration has been raised to 10 million yuan, resulting in many products being unable to be registered; on the other hand, the market is volatile and investors are more cautious. the combination of the two has led to the current situation of difficult registration.

fundraising is facing a cold winter

in addition to the decline in filing volume due to adapting to the new regulations, the continued adjustment of the market may be an important reason for the sluggish issuance volume and scale of private equity funds this year.

wind data shows that in december last year and january this year, the market expected a structural bull market this year, and funds entered the market enthusiastically. the scale of new private equity registrations was 60.319 billion yuan and 55.322 billion yuan respectively, and the number of registrations was 1,537 and 1,252 respectively.

in february this year, the market encountered a sharp fluctuation. the monthly scale of private equity was halved to 28.354 billion yuan, and the number of registrations also shrank to 780. in may this year, the monthly registration scale of private equity fell below 20 billion yuan to only 19.821 billion yuan, of which the registration scale of private equity securities investment funds was only 8.918 billion yuan. in july this year, the registration of new private equity products rebounded, and the monthly registration scale rebounded to 33.363 billion yuan.

"fundraising in this year's market is particularly difficult. many times, after several roadshows, we cannot sell even 10 million yuan. now we simply suspend new issuances, work hard to manage the money in our hands, and survive this round of cold winter." the head of a private equity fund in shenzhen told reporters.

wang xi, chairman and fund manager of zhejiang jiuxing investment, said that objectively speaking, the market is still continuing to kill valuations and industry clearing, and trading funds generally lack confidence. from a macroeconomic perspective, the growth rate of money supply in the second quarter hit a record low, among which non-financial corporate demand deposits fell sharply, down 3.01 trillion yuan from the end of the previous quarter. the scale of new short-term and medium-term credit for residents has declined. the relatively sluggish economic data also largely reflects that the real economy is still in the bottoming stage.

private equity: bottoming out is obvious, policy catalysis is still needed

due to the poor market performance, private equity funds generally remain cautious and dare not increase their holdings easily.

according to data from private equity ranking network, as of august 16, the equity private equity position index was 79.46%, which was basically the same as last week. equity private equity firms are currently more inclined to maintain their existing positions and wait for the market to bottom out.

yingfeng capital said that structurally, high dividend, precious metals, home appliances and other sectors performed well this week, driven by the dividend resistance, the fed's interest rate cuts and warming home appliance sales. looking ahead, considering that domestic fundamentals are still weak, we expect that the equity market may still need policy catalysis in the short term.

wang xi believes that the dividend sector, which has already seen considerable growth this year, should be avoided, and more attention should be paid to industries that have reversed adverse circumstances, such as games, real estate, and new energy. at the same time, hong kong stocks are also worth paying attention to. the recent appreciation of the rmb has made chinese assets more attractive. if the us dollar index falls below the key point of 100, both the a-share and hong kong stock markets are expected to usher in capital inflows.

xiangju capital said that from the perspective of price-to-book ratio, the proportion of stocks at the bottom of the current a-share valuation is higher than the levels at the market bottom in 2018 and 2022, and the price-to-book ratio percentile since 2010 is as low as 1.1%, and the market valuation has reached an extremely low level. the latest statistics (as of august 22) show that the current percentiles of the stock-bond return ratio and the stock-bond return spread (fed model) are both at a high level of 99.9%, which is extremely cost-effective.

"overall, what the market lacks at present is not funds, but confidence. market confidence comes from the improvement of economic fundamentals on the one hand and expectations on policy direction on the other. in this moment of waiting for dawn, we should stay sober and pay enough attention to the market, industry and enterprises. especially for some industries that are already at the historical bottom and contain changes of the times, when a rebound or even a reversal occurs, we should be prepared." wang xi said.

editor: li xuefeng

proofreading: yang lilin

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