- Only listed private equity funds that are approved by the MPFA under section 8(2) of Schedule 1 to the Mandatory Provident Fund Schemes (General) Regulation (the Regulation) may be invested by an MPF fund. Approval is granted on a case-by-case basis, after assessing the salient features of individual listed private equity funds. A list of MPFA-approved listed private equity funds will be set out in MPFA’s Guidelines III.2 on Equities and Other Securities.
- To be eligible for approval by MPFA, a private equity fund must be listed on The Stock Exchange of Hong Kong Limited (SEHK) and authorized by the Hong Kong Securities and Futures Commission (SFC). When considering granting approval, the MPFA will also assess relevant fund-specific factors, including whether the fund primarily invests in private equity in its underlying assets, whether the fund’s volatility is within an acceptable level, whether the fund’s ongoing charge is reasonable, and that the fund should not be used as a means to circumvent existing MPF investment restrictions (e.g. invest in an MPF non-permissible asset class).
How can a private equity fund be listed on HKEx and authorised by the SFC?
On 17 February 2025, the SFC published its Circular on Listed Closed-ended Alternative Asset Funds, which clarifies the regulatory framework for the SFC to authorise closed-ended collective investment schemes that invest in private and illiquid assets (“Alternative Funds”). This includes private equity funds.
Once the Alternative Fund has been authorised by the SFC, it should be listed on SEHK pursuant to Chapter 20, like other listed collective investment schemes such as REITs and ETFs.
For further information, please see our more comprehensive summary of the new listed Alternative Funds regime published on 19 February 2025.
Our relevant credentials
Prior consultation with the SFC is required before an applicant applies for authorisation of an Alternative Fund for listing. While this is a new regime, Baker McKenzie has an established track record of facilitating SFC authorisation for other funds, including REITs and pension funds.
Band 1 Law Firm for Investment Funds: Registered Funds
Band 1 Law Firm for Investment Funds: Private Equity
Chambers Asia-Pacific, 2025
We will continue to monitor further developments on Alternative Funds. If you have any questions on any of the above matters, please liaise with your usual contact at Baker McKenzie or the lawyers listed in this client alert.
