Starting on 16 May 2019, Thai retail mutual funds ("Retail Funds") can directly invest in the units of a qualified private equity fund1 as a result of the recent amendment to the regulation by the Capital Market Supervisory Board.2 The key characteristics of the qualified private equity fund are that:

  • The private equity fund must have a say in the operations or development plan of the business in which it invests.
  • No conditions which make the investor be more liable than the investment already made in the private equity fund.
  • Current information and the fair market value of the units of the private equity fund are made available to the investor. 
  • Units of the private equity fund must be transferable. 
    • Offered for sale in a country where its securities and exchange supervisory authority is an ordinary member of the International Organization of Securities Commissions (IOSCO);3 or 
    • Traded on an offshore securities exchange that is a member of the World Federation of Exchanges (WFE).4

The limitation of this new opportunity is that the investment of Retail Funds in the unit of the private equity fund is subject to some investment limits, including the single entity limit – which limits the investment in a non-listed private equity fund at 5 percent of the net asset value (NAV) of the Retail Fund5 and at 10 percent6 of the NAV of the Retail Fund when investing in a listed private equity fund.7

Based on this, although the feasible structure and characteristics of the investment by the Retail Fund in the units of the private equity fund as recently permitted seem to be limited, these are the first steps for a broader regime for Retail Funds to directly invest in private equity funds. Future amendments should be closely followed to see whether the Capital Market Supervisory Board will provide further relaxations in the future, allowing Retail Funds be able to compete with other players in the global market. 

We will keep you posted if there are any further developments.


1. Previously, Retail Funds were only allowed to indirectly invest in a private equity fund through a collectiv  e investment scheme (CIS).
2. The other new eligible asset of Retail Funds is units of a collective investment scheme (CIS) which are traded on a securities exchange that is a member of the World Federation of Exchanges (WFE), subject to certain qualifications and limitations.
3. See https://www.iosco.org/about/?subsection=membership&memid=1
4. See https://www.world-exchanges.org/membership-events
5. When taking certain types of the Retail Fund's eligible assets, such as non-listed securities, into account.
6. Or the weighting of the investment assets in the benchmark plus 5 percent of the NAV of the Retail Fund, if it is higher.
7. When taking certain types of the Retail Fund's eligible assets, such as OTC derivatives and listed securities, into account.
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