Parallel fund refers to the establishment of two private equity funds at home and abroad at the same time, entrusting the same manager to carry out investment management. When a project is found, the two funds invest at the same time, which generally accounts for 50% of the investment.

Advantages of parallel fund investment strategy;

1) substitution function. If domestic funds cannot legally settle foreign exchange, overseas funds will directly invest in domestic projects. 2) Fund allocation function. If there is a shortage of domestic funds, overseas funds can be agreed to provide more funds, and vice versa.

3) conversion function. If the domestic or overseas legal environment changes, all of them can be transferred to funds with better legal environment for investment. 4) Policy configuration function. Fund managers can decide which fund to invest in according to the changes in tax, legal and other environments, taking the principle of being most beneficial to investors.

Potential advantages of parallel funds:

Parallel funds avoid capital flow restrictions. Due to the limitation of RMB settlement under capital, this structure minimizes the difficulties caused by domestic capital flow restrictions. This practice aims to minimize the approval required by foreign exchange management regulations applicable to domestic investment by foreign investors and overseas investment by domestic investors.