Limited Partners Association of China (LPACN) successfully organized a series of visits to various agencies and regulators to discuss issues facing Limited Partners who are actively investing in Chinese private equity funds in Jul., 2009.

The representatives from Adams Street, LGT Capital Partners, FLAG Capital Management, Morgan Creek, Pantheon, Mousse Partners Limited, Allianz, Emerald Hill, Paul Capital Partners, AXA Private Equity, Siguler Guff and Zero2IPO Group visited Department of Foreign Investment, Ministry of Commerce (MOFCOM), Ministry of Science and Technology (MOST), and Department of Finance of the National Development and Reform Commission (NDRC) - the Chinese government agency in charge of drafting the national regulation on private equity. The discussion topics focused on the actuality of VC/PE market and how to allow foreign institutional LPs to invest in RMB denominated onshore PE Funds without excess control.

LPACN indicated that:

-- They understand that China's National Social Security Fund is interested in having mature institutional investors enter the private equity funds market to co-invest thereby reducing investment risks;

-- On RMB fund formation, LPACN will increase communications with relevant government agencies to address the "hot money" issue that has been a concern for regulators, as well as the "industrial protection" issue;

-- They hope to expand the LP base, regularize LP behaviors, increase exchanges with Chinese institutional investors, and encourage participation by large Chinese institutional investors in private equity funds market.

Most of the questions got positive responses from government officials. They indicated that they are studying the issue of "participation by foreign firms", and asked LPACN to propose specific recommendations to governments in this regard. The visits deepened the mutual understanding and create more opportunities to expand cooperation between LPACN and government agencies.