Taiwan's Financial Supervisory Commission has allowed securities investment trust and consulting companies, or SITCs, to manage and operate private equity funds, the Taipei Times reported Aug. 2.
SITCs may now acquire stakes in projects invested by private equity funds, as well as appoint or recommend third-party managers to those projects. The move aims to attract investments into more diversified projects such as green energy and infrastructure, including power stations and airports. Prior to this, SITCs were limited to managing investment funds in listed securities, the FSC said.
To limit risks, private equity funds will be structured as a limited partnership comprising a general partner and a limited partner, with the former potentially represented by a SITC unit. Limited partners — public and private companies such as pension funds, insurers and wealth individuals — will provide the capital.
The commission will begin reviewing SITCs Aug. 3, with JPMorgan Asset Management Taiwan Ltd. and Cathay Securities Investment Trust among companies that have expressed interest.