TYGlobe

Private equity funds provide professional assistance throughout the entire process from product establishment and investment due diligence to negotiation and post-investment management, offering rigorous and tailored legal services. In todays financial market, private equity funds have become a force to be reckoned with.

Private equity funds primarily refer to private securities investment funds and private equity investment funds established in China through non-public fundraising from qualified investors, which conduct investment activities under the management of fund managers. The former focuses on investing in listed securities such as stocks and bonds, while the latter concentrates on equity investments in unlisted companies.

In recent years, Chinas private equity fund industry has experienced rapid growth. According to data from the official website of the China Securities Investment Fund Association, as of the end of April 2023, there were 22,270 registered private fund managers, 153,539 private fund products, a total scale of 20.75 trillion yuan, and 176,343 professionals in the field.

Private equity funds, particularly private equity funds, play a positive and crucial role in serving the real economy, promoting national strategic implementation, fostering entrepreneurship and employment among small and medium-sized enterprises, supporting innovation in high-tech fields, increasing the proportion of direct financing in capital markets, and meeting social wealth management demands.

However, with the industrys rapid development, a series of risks and issues have gradually emerged. Some institutions have engaged in illegal fundraising under the guise of private equity, selling products to investors who lack risk-bearing capacity, making false statements regarding information disclosure, and even committing serious violations such as misappropriation of fund assets and improper benefit transfers. These irregularities have not only severely damaged the vital interests of investors but also negatively impacted the healthy development of the entire private equity industry.

To regulate the development of the private equity industry, the "Regulations on the Supervision and Administration of Private Investment Funds" was officially promulgated in July 2023, marking a significant milestone in the private equity sector and signaling Chinas private markets progress toward greater professionalism, standardization, and transparency.

Prior to this, the private equity investment industry had long faced issues of insufficient legal basis at the administrative regulation level. Although since 2014, the CSRC has successively issued departmental regulations and normative documents such as the "Interim Measures for the Supervision and Administration of Private Investment Funds" and "Several Provisions on Strengthening the Supervision of Private Investment Funds," and authorized the association to handle self-regulatory functions including registration of private fund managers and filing of private funds, these regulations have remained at a relatively low legal hierarchy with incomplete compatibility. Consequently, private equity funds have long faced challenges including lack of superior legislation, ambiguous legal status, absence of unified norms, and insufficient regulatory basis.

TYGlobe Law Firm provides comprehensive legal services in the private equity field to clients through its profound legal expertise and rich practical experience. During the fund establishment phase, we assist clients in developing legally compliant fund structures tailored to various organizational forms (contractual, corporate, partnership) to ensure regulatory compliance from the outset.

In fundraising, we strictly adhere to the "Private Equity Fund Supervision Regulations" and related provisions, helping clients screen qualified investors, design compliant fundraising procedures, draft and review all fundraising documents, and prevent illegal practices such as disguised public offerings, exceeding investor limits, or guaranteeing principal protection and returns.

Throughout investment operations, we provide due diligence services for projects, assess investment risks from a legal perspective, draft and review key transaction agreements investment and equity transfer contracts to protect client interests, and help establish internal risk control systems to regulate related-party transactions and effectively prevent conflicts of interest. During daily operations and exit phases, we deliver professional legal services to ensure compliance and stability throughout the funds lifecycle.