On February 24th, the practice of fault-tolerant mechanism in state-owned funds has taken an important step recently. The Implementation Rules for Direct Equity Investment of Guangzhou Development Zone (Huangpu District) Science and Technology Innovation and Entrepreneurship Investment Mother Fund have been released, which allows the mother fund to incur 100% losses for seed direct investment and angel direct investment projects. In the industry, it is not common for state-owned parent funds to allow direct investment funds to incur 100% losses in a single project. Many industry insiders believe that this may be a milestone exploration of fault-tolerant mechanisms for state-owned funds. In response, the State owned Assets Supervision and Administration Bureau of Guangzhou Development Zone stated, “Even in the face of failure, we can start anew in a tolerant atmosphere.” Industry insiders believe that the significance of this move is to encourage state-owned funds to boldly invest in high-risk, high-yield early-stage projects; The core of the assessment and fault-tolerant mechanism for relevant state-owned assets and funds lies in its implementation. (China Securities Journal)
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