China Venture Capital Boosting Parallel Funds for US Investors

Chinese early stage funds are increasingly offering a fundraising structure that appeals to US investors wary of American compliance restrictions but keen to grow exposure to non-sensitive sectors in China.

At least two China-based managers known for backing leading artificial intelligence companies have used so-called parallel fund structures for fundraising in recent months, according to people familiar with the matter. They allow US investors to keep exposure to non-sensitive sectors, while opting out of industries they are restricted from putting money into.

Manus-backer ZhenFund set up a vehicle to house US investors and another for other backers for its ...