SECP publishes report on Private Funds sector

ISLAMABAD: The total size of Private Equity and Venture Capital Funds registered a growth of 64 per cent to reach Rs10.99 billion as on June 30, compared with Rs6.69 billion on June 30, 2021, a report showed.

However, the number of Private Equity (PE) and Venture Capital (VC) funds remained the same at five.

The Securities and Exchange Commission of Pakistan (SECP) has released a Diagnostic Review of Pakistan’s Private Funds (PF) Industry, providing a holistic synopsis and recommendations for key fiscal and regulatory reforms required for a vibrant PF industry that can spur economic activity, catalyse job creation and increase government revenues.

The SECP Chairman Aamir Khan said that considering more than 60 per cent of the population comprises youth in Pakistan and to encourage innovation and knowledge-based ideas into commercial production, the potential of PF industry requires to be tapped and fully explored.

The report provides an overall assessment of the country’s PF sector, which collectively refer to both PE and VC Funds and Alternative Funds.

To enable a vibrant and galvanised PF sector, the report also provides policy recommendations for a multifaceted reform agenda.

Apart from properly defining private funds in the tax laws and enabling all private fund categories to avail pass-through status and capital gains tax exemptions, the report provides some basic steps that can augment the investor pool and unify government initiatives for the sector.

The study answers pertinent questions enabling launch of private funds in the alternate legal structure of Limited Liability Partnership as compared to the long prevailing trust structure.

It also recommends a relook into the role of trustee and custodian, considering that these funds target only sophisticated investors and institutions.

The diagnostic review report is an outcome of extensive consultations with private fund management companies, key players of the start-up space and a diverse set of both public and private stakeholders.

Also Read

SECP seeks application from audit firms for placement at auditors’ panel

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has initiated the...