NYPPEX issues China private equity investment risk warning
NEW YORK, September 23, 2021 / PRNewswire / – NYPPEX, a leading global provider of private equity secondary liquidity, today issued a warning regarding the risk of investing in China private equity investments. NYPPEX believes that China enters a new phase of government policies which, in short, seek to focus on “common prosperity” and Mao Zedong’s vision for transitional capitalism. Mao Zedong believed that capitalism was initially necessary only to reduce widespread poverty in the China.
It was reported by Reuters on Friday September 17th, which Chinese government officials recently told major real estate developers of Hong Kong prepare for higher taxes to help solve the city’s housing shortage, such as Beijing planned to target the city’s wealth gap and skyrocketing house prices. As a result, on Monday, September 20, shares in Li Ka-shing’s CK Asset fell around 9.3% and Henderson’s Land lost 13.2%.
Further away September 10, Blackstone scrapped its $ 3 billion acquisition of Soho China, a major real estate developer, despite a roughly 60% discount on Soho’s book value at the end of 2020.
NYPPEX estimate that from China policy changes in 2021 resulted in a drop of more than 1000 billion dollars of the stock market value of Chinese companies listed on the stock exchange.
NYPPEX considers that a possible lack of Evergrande Group in China, a large Chinese real estate developer with more than $ 125 billion in debt, could have an adverse effect on funds around the world. Some China Evergrande the bonds traded at around 25% of their face value in September 2021.
NYPPEX believes that recent declines in Chinese stocks will pose increased risk to private investment in Chinese private companies and private equity funds.
NYPPEX believes that the time has come for investors and funds to assess their exposure and portfolio allocations to investments in China private capital.
About NYPPEX Holdings
NYPPEX Holdings operates a global private market that provides price data and the ability for qualified investors to access secondary liquidity in alternative investment funds in a fair and ethical manner. Its clients include alternative investment funds, financial institutions, endowments, foundations, institutional investors, family offices, private clients and their respective advisors around the world.
Since 2004, the NYPPEX QMS ™ was previously recognized by the US Internal Revenue Service as a Qualified Matching Service for Private Partnerships through a private letter under Internal Revenue Code §1.7704.
In 2014, the NYPPEX (Shanghai) Investment Consulting Co. Ltd. was among the first foreign financial companies approved as members of the Shanghai Free Trade Zone (FTZ), along with Oaktree Capital, Citadel and Man Group. Among its features, the Shanghai Free Zone allows convertibility of the yuan and unrestricted exchange of currencies, as well as a 10-year tax-free period for businesses in the region.
Its private securities are offered privately to qualified investors through NYPPEX, LLC and only in jurisdictions were allowed. NYPPEX is regulated in the United States by the SEC and FINRA. FINRA, SPIC member.
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SOURCE NYPPEX Private Markets