Summary
[Accrual of Quantitative Private Equity Performance Compensation Welcomes New Regulations Client Losses shall not be accrued for excess performance compensation]Quantitative private placement, which has been making great strides in recent years, has received the focus of supervision. According to quantitative private equity sources, some custodians have received window guidance in December 2021, requiring private equity managers not to accrue performance remuneration for excess returns when clients lose money, and the client’s share cannot be a loss after the accrual is completed. state. At the same time, some quantitative private equity products are no longer applicable to the fast filing channel, the filing cycle is prolonged, and the supervision of the quantitative private equity industry is becoming more stringent.
In recent years, quantitative private equity, which has been advancing by leaps and bounds, has received the focus of supervision.According to quantitative private equity sources, some custodians have received window guidance in December 2021, requiring private equity managers not to accrue excess returns when clients lose money.performanceRemuneration, and the customer’s share cannot be in a loss state after the accrual is completed. At the same time, some quantitative private equity products are no longer applicable to the fast filing channel, the filing cycle is prolonged, and the supervision of the quantitative private equity industry is becoming more stringent.
Industry insiders said that quantitative investment has a broad space for development. Referring to the development law of mature markets, effective industry norms are essential, and the significantly increased regulatory attention will contribute to the healthy development of the industry.
There is a “new rule” in the provision of performance compensation
Recently, ShanghaisecuritiesThe reporter learned in the interview that the regulation prohibits the quantification of private equity managers from accruing performance remuneration for excess returns when investors are losing money.
“The custodian informed us in December that we had received window guidance tofundcontractMedium sizeFixed voteWhen the absolute income of the investor is negative, the manager cannot accrue performance compensation, so the contract has to be re-written. ” revealed a tens of billions-level quantitative private equity source in Shanghai.
A reporter obtained abrokerageThe recent product filing policy PPT produced by the Custody Department this month also mentioned that index-enhanced products are not allowed to accrue performance remuneration in the event of a customer loss. The previous practice of accruing performance remuneration that exceeds the index part is already non-compliant. At the same time, the private equity manager needs to ensure that the investor’s shareholding returns are positive after the excess performance remuneration is accrued, that is, the investor should also be in a positive income state after the private equity manager withdraws the performance remuneration.
A ten-billion-level private equity general manager in Shanghai revealed: “When the product was filed recently, if the association finds that the net value of the product is less than 1 yuan and can accrue excess performance compensation, it will request to revise the contract.”
According to the above-mentioned tens of billions of quantitative private equity people, the index enhancement strategy is one of the three core strategies of quantitative private equity. In the event of a loss, performance remuneration is still accrued. For example, the CSI 500 Index fell by 20% in a certain period of time, and the index-enhanced products purchased by investors fell by 10% in the same period. According to the previous regulations, private equity managers can withdraw 10% of the performance remuneration for excess returns, but this Difficult for investors to accept.
Channel sources also said frankly: “In the past, a small number of quantitative private placements in the industry accrued performance rewards based on excess performance. In the past two years, some clients want to accrue based on excess earnings, so there are more and more quantitative private placements in this way. However, this approach does cause controversy when the index falls, and the new regulations can protect the interests of holders to a certain extent.”
Regulatory attention has increased significantly
Since last year, quantitative private equity, which has been advancing rapidly, has attracted more and more attention from supervision.
Quantitative private equity sources revealed to reporters that since the fourth quarter of last year, the company will be returned due to many details when filing private equity products, so the current product filing time is still relatively long.
At the beginning of 2020, China Foundation Association launched a pilot reform of the “separation system + random inspection system” for private equity fund product filing. In September 2021, the China Foundation Association launched the second phase of the pilot work of the lane separation system, and the filing speed of qualified high-quality private equity institutions products will be accelerated. However, some private equity feedback said that the fast filing channel may no longer be applicable to some private equity quantitative products.
In addition, the supervision has also strengthened the monitoring of quantitative investment products through multiple means. In November last year, China Foundation Association issued the “Notice on Launching the “Quantitative Private Equity Fund Operation Report” to private equity fund managers. After the announcement of the notice, the frequency of reporting operational data by managers of quantitative private equity funds has been increased from quarterly to monthly.In the same month, the China Securities Association also issued the “On DevelopmentsecuritiesThe Company’s Quantitative Transaction Data and Information Submission Notice” clearly requires securities firms to carry out quantitative transaction data and information submission in order to further grasp thesecuritiesIndustry proprietary, asset management quantitative strategies and scale.
The focus of top private equity work shifts to strategy optimization
A 10-billion-level quantitative private equity person in Beijing said: “From the perspective of the development law of mature foreign markets, quantitative investment has a broad space for development, but at present, investors do not have enough understanding of quantitative strategies, and some quantitative private equity styles are also relatively aggressive. Effective industry norms are essential.”
Under the background of stricter supervision, the pace of filing of quantitative private equity has slowed down significantly, and the top quantitative private equity managers have begun to concentrate on polishing their own strategies.
According to the latest data from Private Equity Pai Pai.com, January is about to pass halfway through, but as of January 13, the number of new quantitative private placement filings was only 52, while the number of quantitative private placement filings in January last year was as high as 565. In addition, judging from monthly data, quantitative private equity filings have cooled significantly since the fourth quarter of last year. According to statistics, in the third quarter of last year, the number of monthly filings for quantitative private placements was around 1,000, but the number of filings in October plummeted to 587, and the number of filings in November and December was only about 800.
“Tightening regulation is one of the reasons for the slowdown in filing, but the most important thing is that the focus of the top quantitative private equity managers has changed.” A top quantitative private equity person in Shanghai said that in the past two years, the scale of many quantitative private equity has grown rapidly. , although the popularity has increased significantly, it also means that the competition is becoming more and more fierce. For example, a quantitative model that has just been developed may experience a significant attenuation of returns (or excess returns) due to more efficient strategy iterations by other quantitative institutions. Therefore, returning to a more peaceful release rhythm and focusing more on model optimization and iteration has become the consensus of most leading quantitative institutions.
(Article source: Shanghai Securities News)
(Original title: Quantitative private placement performance compensation is accrued to welcome new regulations for customer losses, and excess performance compensation shall not be accrued)
(Editor in charge: 43)
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