China’s securities regulator has launched a new pilot program that enables share distributions by private equity (PE) and venture capital (VC) funds, adding a much-needed alternative exit option for them.
The program aims to create a straightforward way for funds to distribute shares in one of their portfolio companies to their investors, who are usually limited partners. This type of non-cash payment, known as a distribution-in-kind, is common in overseas markets, but previously was much harder to do in China.
