ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has introduced a new category of Venture Capital Fund, titled “Angel Fund”, aimed at channeling investments into early-stage startups.
In a notification issued on Monday, the SECP announced amendments to the Private Fund Regulations, 2015, to create the new structure. The Angel Fund is defined as a sub-category of a Venture Capital Fund, established under a closed-end structure, which primarily invests in unlisted securities or financial assets of early-stage startups.
According to the revised framework, eligible investors for the Angel Fund include individuals with an income of at least Rs. 5 million in the preceding financial year or net assets of Rs. 15 million (excluding personal residence), as well as qualified institutional buyers. Investors are also required to furnish a declaration confirming their understanding of the risks associated with private fund investments.
The SECP has also updated definitions for other categories of funds under the revised regulations. These include:
-
Fund of Funds: A private fund, in closed or open-end structure, investing primarily in units of other private funds.
-
Hedge Fund: A private fund in either open or closed-end structure that employs diverse trading strategies and invests primarily in portfolio securities and financial assets.
-
Impact Fund: A closed-end private fund investing in unlisted securities or financial assets of socially responsible companies with a focus on environmental, social, and governance (ESG) issues.
-
Infrastructure Fund: A closed-end private fund investing in unlisted securities or financial assets of companies engaged in infrastructure projects, including transportation, utilities, and energy.
The SECP said these regulatory changes aim to encourage greater investment in Pakistan’s startup ecosystem while also providing diversified investment avenues for institutional and high-net-worth investors.
