NYPPEX Issues Warning About Investment Risk in China Private Equity

NEW YORK, Sept. 23, 2021 /PRNewswire/ — NYPPEX, one of the world’s leading providers of secondary private equity liquidity, today issued a warning about investment risk in China private equity investments. NYPPEX believes that China is entering a new phase of government policies that, in summary, seek to focus on "common prosperity" and Mao Zedong’s vision for transitory capitalism. Mao Zedong believed that capitalism was initially only needed to alleviate widespread poverty in China.

It was reported by Reuters on Friday, September 17, that Chinese government officials recently told large property developers in Hong Kong to prepare for higher taxes to help solve the city’s housing shortage, as Beijing planned to target the city’s wealth gap and runaway housing prices.  As a result, on Monday, September 20, shares in Li Ka-shing’s CK Asset fell approximately 9.3% and Henderson Land lost 13.2%.

Further, on September 10, Blackstone scrapped its pending $3 billion acquisition of Soho China, a large property developer, despite having received an approximate 60% discount to Soho’s book value as of the end of 2020.

NYPPEX estimates that China’s policy changes in 2021 have caused a decline of more than $1 trillion in stock market value in publicly-traded Chinese companies.

NYPPEX believes that a potential default by China Evergrande Group, a large Chinese real estate developer with over $125 billion in debt, could have an adverse effect on funds worldwide.  Some China Evergrande bonds are reported to have traded at approximately 25% of face value in September 2021.

NYPPEX believes the recent declines in Chinese stocks will cause greater risk for private investments in Chinese private companies and private equity funds. 

NYPPEX believes this is an opportune time for investors and funds to evaluate their exposure and portfolio allocations to investments in China private equity.

About NYPPEX Holdings

NYPPEX Holdings operates a global private marketplace that provides price data and the opportunity 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 worldwide.

Since 2004, the NYPPEX QMS™ has been formerly recognized by the U.S. Internal Revenue Service as a Qualified Matching Service for private partnerships though a private letter ruling under Internal Revenue Code §1.7704.

In 2014, the NYPPEX (Shanghai) Investment Consulting Co. Ltd. was among the first foreign financial firms approved as members into the Shanghai Free Trade Zone (FTZ), along with Oaktree Capital, Citadel and Man Group. Among its features, the Shanghai FTZ permits yuan convertibility and   unrestricted foreign currency exchange, and a tax-free period of 10 years for the businesses in the area.

Its private securities are privately offered to qualified investors through NYPPEX, LLC and only in jurisdictions were permitted. NYPPEX is regulated in the U.S. by the SEC and FINRA. Member FINRA, SPIC.

Copyright 2021 NYPPEX Holdings, LLC. All rights reserved.

For more information, please visit www.nyppex.com or contact 
 or by phone at +1 (914) 305-2825.

SOURCE NYPPEX Private Markets

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