Pakistan sets stage for private equity boom

Mettis Global reported that Pakistan has begun drafting a National Private Equity Policy Framework to draw larger long-term funds from home and abroad. The government intends to pair the effort with changes to regulation and taxation that would bolster the private equity system. The initiative was launched during the first session of a committee formed by the Prime Minister, chaired by Finance and Revenue Minister Senator Muhammad Aurangzeb.

The four streams will handle taxation, the regulatory setup, commercial strategy and screening of projects ready for investment. Finance Division stated that the state intends to create a supportive environment rather than provide money directly, with the private sector leading the framework. The discussion covered removing policy and tax obstacles that could deter patient capital, including how PE funds should be taxed and more room to reinvest money. Their recommendations will be consolidated into the National Private Equity Policy Framework for the Prime Minister.

Institutional investors could raise long-term money through professionally managed vehicles, with regulatory safeguards and global standards kept intact. The committee sees private equity helping firms in emerging and priority sectors expand, grow in scale, raise productivity and compete better, and it also noted possible roles in mergers, restructuring and privatisation. Aurangzeb urged a visible flow of well-prepared plans and projects so investors have clarity and capital can be put to use effectively.