SECP grants first licence for private equity fund

It will help raise funds from high net-worth investors

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has approved the first application filed by a non-banking finance company (NBFC) under the newly promulgated Private Fund Regulations 2015 for undertaking private equity and venture capital fund management services.

The licence will allow Lakson Investments Limited to launch private equity and venture capital funds as well as alternative funds.

“The licence is the first step for the regulation of private pools of capital that are raised locally for deployment by various types of investment funds,” the SECP said in a statement.

It will facilitate the raising of funds from high net-worth investors through different types of funds like private equity funds, infrastructure funds, hedge funds, debt funds, etc.

According to the prevalent regulatory requirement, the private equity and venture capital funds should be established in a closed-end structure for investment in securities of an unlisted company or a company listed on the SME board or an unlisted company investing in developing a new product or process or desiring expansion of its business.

The alternative fund, on the other hand, should be established for investment in the portfolio of securities and other financial assets.

These funds will be regulated under the Private Fund Regulations 2015, which have comprehensive features such as investment strategy, disclosure of periodic information to investors, valuation procedure, audit of funds, etc.

“These regulations will surely bring greater clarity to the market, help in monitoring the unregulated funds and encourage formation of new capital,” the SECP said.

Published in The Express Tribune, October 19^th, 2016.

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