On August 26, 2022, the Method of Xiamen Free Trade Zone to Promote the Development of Private Equity Fund of Funds was officially released. Report has it that the Method represents China's first policy to support fund of funds (FOF). The Method will take effect on October 1 this year and be valid for three years. The Method contains ten policies that focus on settlement rewards, economic contribution rewards, investment contribution rewards, and rent subsidies. For example, the administrative institution of a settled FOF will receive a lump-sum reward based on the scale of the paid-in capital after it contributes to the first participating sub-fund: a reward of 8 million yuan for a paid-in capital of 5 billion yuan (inclusive) to 10 billion yuan; a reward of 10 million yuan for a paid-in capital of 10 billion yuan or above. This supporting policy for FOFs directly aims at the supply side and will offer better support for VCs and PEs while promoting the development of FOFs.
