Private equity ecosystem: Govt has moved to unlock capital flows, says finance minister

Business Recorder reported that the government is working to draw more long-term capital, both local and overseas, by preparing a National Private Equity Policy Framework. The plan aims to strengthen the private equity system in Pakistan, reduce regulatory and tax obstacles, and build a pipeline of projects that investors can finance.

Finance Minister Muhammad Aurangzeb chaired the opening session of a committee that the Prime Minister formed to draft the framework. Members assessed how private equity could finance growth, expansion and productivity gains at Pakistani firms, and they also weighed its part in mergers, acquisitions, restructuring and privatization. Aurangzeb argued that private sector participation should lead the effort, with the state focusing on a favourable setting rather than handing out direct funds.

The committee also examined the current ecosystem and explored tax and regulatory measures, including how private equity funds should be classified and the role of institutional investors in pooling long-term capital through professionally managed funds under regulatory safeguards. It agreed to set up four work streams on taxation, regulation, business strategy and bankable business plans. Its final recommendations will be combined into the framework and then sent to the Prime Minister for review.