SHANGHAI May 21 Shengjing, a Chinese investment
advisor and manager, has launched the country’s first investment
fund dedicated to helping overseas-listed Chinese firms to
delist and list instead on domestic stock markets, the official
China Securities Journal reported on Thursday.

The 2 billion yuan ($322.50 million) fund of funds (FoF)
aims to bring home Chinese companies which currently have
so-called variable interest entity (VIE) structures, and are
partially held by U.S dollar funds, the newspaper said.

VIE structures have been widely used by Chinese technology
companies, in particularly internet giants like Alibaba
, Baidu and Tencent.

Because foreign ownership in China’s internet sector is
blocked, and Chinese internet startups have difficulty meeting
profitability requirements to list onshore, the VIE structure
was developed to satisfy the ownership requirements of overseas
security regulators without technically breaking Chinese law.

The FoF will invest in about 10 funds with that purpose,
which could eventually see at least 10 billion yuan of funds at
work to bring over 100 overseas listed companies home, the
article said.

China’s start-up board ChiNext and the country’s
leading over-the-counter marketplace, the New Third Board, has
attracted huge investor interest, with valuation of companies
listed there soaring.

But trading in many overseas-listed Chinese companies is
generally lukewarm, partly due to some offshore investors’
distrust of such entities.
($1 = 6.2015 Chinese yuan renminbi)

(Reporting by Samuel Shen and Pete Sweeney)