China VCs seen eking out extra fees on co-investments

Prominent global investor calls out a growing and contentious business practice in China as investors capitalise on their investment rights in later-stage venture capital deals.

Venture capital funds are selling their rights to invest in some of China’s hottest start-ups, resulting in a hodgepodge of fee structures for later-stage investors.

It's a trend that has evolved in recent years in China, according to Kelvin Yap, managing director at HarbourVest Partners, a global fund-of-funds firm.

“It’s rampant here in Asia,” he told an industry conference on Monday.

HarbourVest has about $50 billion under management, operating across private equity fund investments, secondaries as well as about $10 billion in co-investments.

Venture capital firms are investors that typically get involved in the very...

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