China Securities Regulator Proposes Higher Thresholds for Individual Investors in Single-Project Private Funds

Single-project funds channel capital into one identified project, are relatively small in scale, and invest efficiently. Multiple industry participants report that recent filings for such funds have drawn more regulatory feedback, longer timelines, and higher thresholds for capital contributions, investor numbers, and custody requirements. The China Securities Regulatory Commission recently released draft measures for public comment on supervising private fund fundraising, raising the thresholds for individual limited partners (LPs) investing in single-project funds in terms of investment experience, asset scale, and capital contribution.

According to CVINFO statistics, only 30 single-project funds were established in China in 2010. The number rose steadily thereafter, peaking at 1,530 in 2021, and exceeded 800 in 2025. Recently, several leading institutions have felt the establishment process for single-project funds tighten, from window guidance and association filing inquiries to custodian admission.

The draft fundraising rules propose that if more than 80% of a fund's paid-in scale is invested in equity of real estate project companies, a single underlying asset, overseas assets, or over-the-counter derivatives, which the market generally understands as a single-project fund, individual LPs must simultaneously meet several conditions. These include at least four years of relevant investment experience, household financial assets of no less than RMB 10 million, household financial net assets of no less than RMB 6 million, a minimum investment of RMB 1 million in a single fund, and the corresponding ability to identify and bear risks.

On the filing side, some fund managers have found that the filing period for single-project funds has lengthened significantly and that feedback questions have increased markedly. Some institutions have received guidance that, in principle, the same manager may not submit two single-project fund filing applications simultaneously. Other institutions previously kept two or three registered corporate shells on hand to enable rapid launches, but this practice is now restricted in some regions. Some localities require that if a manager already has a registered but unused entity, it may no longer register a new corporate entity, even if the LP changes.

Custody has also created new thresholds. The draft fundraising rules specify that funds investing more than 80% of assets in a single underlying asset must be custodied. In bank custody practice, standards vary somewhat across banks. Some banks require that a single-project fund have around 15 individual LPs, while others require only five.

Even as establishment thresholds rise, market demand has not cooled. Against the backdrop of difficult fundraising for blind-pool funds, insufficient LP confidence, and shorter windows for quality projects, single-project funds have drawn increasing attention from institutions and LPs over the past two years. Some blind-pool funds list popular candidate projects during roadshows, but after the fund is established it may not invest in those projects. Some general partners repeatedly publicize successful projects under the blind-pool model while disclosing insufficiently on projects that run into risk. Individual LPs generally find it difficult to perceive specific underlying project risks in a timely manner through aggregate data such as IRR and DPI. Single-project funds have clear investment targets, so LPs can see the underlying project before contributing capital.

Given the short financing windows for projects, the flexibility of single-project funds is a clear advantage. Some project owners want managers to invest directly using existing capital in funds under management, and some ask to see redacted account balances to prove financial strength. On exits, single-project funds can be liquidated directly after the project exits, with a relatively clear process, whereas blind-pool funds depend on the distribution mechanism set out in the fund agreement, which varies widely across institutions. By raising investment thresholds, regulators are screening in individuals with investment experience, sufficient risk awareness, and risk capacity.

Alongside the rapid growth of single-project funds, problems have accumulated in the industry. Some institutions treat single-project funds as a fundraising packaging tool, promoting them around star projects and using project hype to attract capital. In financing around leading large-model companies, some individuals peddled shares in single-project funds tied to leading projects across multiple investment groups. The project owner issued a statement clarifying that no so-called special channels or old-share quotas existed and alleged that some institutions were involved in fraudulent financing. The practice of attracting multiple individual LPs through share splitting, and even packaging old-share transfers as single-project funds, has also drawn industry attention.

Interviewees generally believe that, over the long term, stricter regulation of single-project funds will help return the industry to its origins. Fund managers with a complete track record of operating multiple single-project funds, mature teams, compliant processes, and a focus on industrial investment are relatively less affected. Single-project funds will gradually shed their character as a pure fundraising tool and return to the essence of industrial investment and value discovery.