ISLAMABAD: Record seven private funds have been registered in the current calendar year, taking the total number to 12.

There have only been five private funds registered with the Securities and Exchange Commission of Pakistan (SECP) for the past several years, but the amendments to the Private Funds Regulations have paved the way for a conducive environment for the growth of both venture capital and private equity funds.

Two venture capital (VC) and four private equity & venture capital (PE&VC) have been registered along with the establishment of the country’s first alternative fund this year. These funds have a net worth of around Rs13.6 billion and

are expected to be launched before June 30, 2023.

A senior official of the SECP told Dawn said that incentivised by the consistent reform measures a sharp growth has been witnessed during the past three years in the number of Private Funds Management Companies (PFMC) from four to 10.

The PFMC is a non-banking finance company licenced by the SECP to manage PE and VC funds.

Following the launch of these funds, the cumulative asset size of PF sector is expected to increase to Rs25.8bn from Rs12.287bn as of Sept 30, 2022.

The SECP has conducted a diagnostic review of Pakistan’s private fund industry and recommended measures to revitalise the sector. The Federal Board of Revenue (FBR) on the recommendation of SECP exempted the income of PE&VC funds from tax.

The SECP has also allowed insurance unit-linked funds and equity sub-funds of pension funds to invest up to 5pc of net assets in PF units.

Published in Dawn, December 14th, 2022