Recently, Prosperity Investment successfully completed the establishment of China's first S-Fund Continuation & Restructuring Fund. With a total size exceeding RMB 600 million, the fund achieved over-subscription and secured commitments from 14 long-term capital providers as Limited Partners (LPs), including state-owned enterprises and insurance companies. Notably, this marks the first S-fund continuation transaction in China to involve insurance capital, which accounted for over 40% of the total fund size.

This fund adopts an innovative "Restructuring & Allocation" model. High-quality assets were systematically screened from an existing S-fund's portfolio and re-grouped to form this new continuation fund. This structure not only facilitates a smooth exit for the original S-fund but also provides LPs with a clearly defined and manageable asset portfolio. The successful launch of this fund offers an innovative solution for S-fund exits and provides a replicable pathway for long-term and "patient" capital to participate in S-investments.

Prosperity Investment has been involved in the S-fund sector since its inception. After 15 years of accumulation and innovation, and backed by professional investment management capabilities deep-rooted in regional markets and specific industries, the S-strategy has become a core strategic pillar for the firm. Prosperity Investment currently manages nearly RMB 5 billion in S-strategies, with products ranging from funds and managed accounts to inventory custodianship and SPVs, having completed over 50 S-transactions to date.

Llinks has been deeply engaged in the field of fund establishment and investment for many years. Acting as the legal counsel for this S-Fund Continuation & Restructuring Fund, Llinks worked closely with the Prosperity Investment S-fund team, leveraging its extensive project experience to provide comprehensive legal services. The scope of work included transaction structure design, the drafting and revision of transaction documents, and the filing of the fund product.

Llinks Engagement Team

Lawrence An, Partner

Sunny Feng, Associate

Michael Wu, Associate