Credit China, jeweler Chow Tai Fook form RQFLP fund
Hong Kong jeweler Chow Tai Fook has teamed up with financial services provider Credit China and private equity firm VMS Investment to form a closed-end Renminbi Qualified Foreign Limited Partnership (RQFLP) fund. The vehicle, named Chongqing Run Ke Equity Investment Fund, will have a corpus of RMB1 billion ($163 million).
According to a filing, Chow Tai Fook will hold a 98% stake in the fund, while Credit China's subsidy Ever Step and VMS will hold the remaining 2%. Credit China has contributed RMB180 million ($29.3 million) to the fund.
Ever Step and VMS will set up an onshore company to manage the fund. It aims to achieve high returns through low risk investments in lending transactions in China, particularly in real estate.
Two months ago, the Chongqing government rolled out a trial RQFLP program, easing the path for offshore reniminbi-denominated funds to invest in private equity. Shenzhen's economic experiment zone Qianhai and Shanghai have also launched similar renminbi convertibility investment programs.
The RQFLP initiative is an extension of Qualified Foreign Limited Partner (QFLP) scheme which was introduced two years ago in Shanghai, Beijing and Chongqing to enable overseas players to convert foreign currency into renminbi for onshore investments.
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