The Financial Supervisory Commission yesterday gave the green light for securities investment trust and consulting (SITC) firms to manage and operate private equity funds, in a bid to attract investment into projects such as “green” energy and infrastructure to boost the economy.
While investment funds operated by SITCs are limited to listed securities seeking capital gains, private equity funds directly invest and participate in the management of projects such as power stations, airports and other infrastructure, the commission said.
Under the new rule, SITCs will be able to acquire stakes in those projects and appoint or recommend third-party managers to investees’ management teams, the commission added.
To manage risks, private equity funds are to be structured as a limited partnership composed of a general partner and a limited partner, the commission said, adding that the arrangement is commonly seen in the international market.
The general partner is to be represented by a new subsidiary formed by the SITC and tasked with managing and investing the fund’s capital committed by limited partners — which are public and private companies, such as pension plans, insurers and high net worth individuals, the commission said.
However, private equity funds are still subject to Financial Consumer Protection Act (金融消費者保護法), which stipulates that such fund products cannot be promoted through general advertising services, the commission said.
Domestic banks and insurers are estimated to have NT$2 trillion (US$66.18 billion) and NT$300 billion respectively in investable capital.
The commission said that it would begin reviewing applications by SITCs tomorrow, with JPMorgan Asset Management Taiwan Ltd (摩根資產管理) and Cathay Securities Investment Trust (國泰投信) having expressed an interest in this field.
In response to the government’s Forward-looking Infrastructure Development Program, JPMorgan Asset Management in April announced plans to launch a NT$9.1 billion private equity fund denominated in New Taiwan dollars for institutional investors.
The fund is expected to yield a rate of return of 6 to 7 percent, while offering investors fixed dividend returns of 3 to 6 percent, JP Morgan Asset Management said.
Solar and wind power projects have an investment duration of 20 to 25 years, and institutional investors must commit to minimum investments of eight to 10 years, it said.
Separately, the commission said that it has begun investigating possible irregularities that led to the departure of JPMorgan Asset Management chairperson Judy Shih (石恬華).
The investigation was prompted by a probe into the company by its US-based parent regarding accounting irregularities related to employee training programs and excursions, the commission said, without elaborating.
Preliminary findings showed that the Taiwan unit had inflated its expense reports and had spent the difference on other activities, including sponsorships without authorization, the commission said.
Operators of offshore investment funds are prohibited from providing cash and other incentives to its sales channels, the commission said.
Facebook Inc on Wednesday reported its profit doubled in the second quarter as digital advertising surged, but warned of cooler growth in the months ahead in an update that sent its shares sinking. Profit rose to US$10.4 billion on revenue of US$29 billion, a 56 percent increase from last year, mainly from an increase in ad revenue, Facebook said. The number of people using the social network monthly climbed to 2.9 billion, a year-on-year gain of 7 percent, while about 3.5 billion people used at least one of the company’s apps, including Instagram, WhatsApp and Messenger. “We had a strong quarter, as we
FURTHER TAX MEASURES NEEDED? Corporate owners accounted for almost 30 percent of empty houses, many of which are held by firms that own 10 or more properties The number of unoccupied houses nationwide totaled 876,000 units last year, or 11.94 percent of all houses, the Ministry of the Interior said in a report issued on Thursday. Almost 30 percent of empty houses were owned by companies, suggesting that many corporate property owners engage in house hoarding, the ministry said. Excluding developers and builders, companies still owned 20 percent of empty houses, it said. The report is based on housing units’ electricity use and considers properties that use less than 60 kilowatt-hours per month as unoccupied. The study contradicts Ministry of Finance reports saying that house hoarding subsided and there is no
HIGH-END MARKET: The company has sufficient growth upsides in its four major business segments to reach revenue of US$20 billion, CEO Rick Tsai told investors MediaTek Inc (聯發科), the world’s biggest supplier of 5G smartphone chips, yesterday raised its revenue growth target for this year to more than 45 percent, after strong demand mainly for its mid-range and premium 5G chips pushed net profit to a record high last quarter. The Hsinchu-based chip designer had three months earlier projected a 40 percent growth from NT$322.16 billion (US$11.48 billion) last year. MediaTek expects next year to be another growth year, with a higher 5G penetration rate and accelerating digital transformation during the post-COVID-19 pandemic era. The company also gained confidence about its gross margin improvement on the expectation
CAUSE INVESTIGATED: The incident occurred early in the morning, when electricity demand was low, and did not result in a power outage or a radiation leak, Taipower said The No. 2 reactor at the Guosheng Nuclear Power Plant in New Taipei City’s Wanli District (萬里) experienced a malfunction that triggered an automatic shutdown early yesterday morning, Taiwan Power Co (Taipower, 台電) said. The exact cause of the incident is still being investigated, but there is no risk of a radiation leak, the state-run utility said. “While we are still investigating the exact cause, the automatic shutdown was safely executed and there is no danger from radiation,” Taipower spokesman Chang Ting-shu (張廷舒) said. The malfunction occurred at 6:33am, triggering an emergency shutdown, taking 985 megawatts of power offline, Chang said. The control