A newly established private equity firm Nepoch Capital has established the first 'princeling' fund. Princelings are the offspring of the country's elite who have long been accused of nepotism and cronyism.
Now, the new government is clamping down on this elitist group who have long been associated with access to private equity investments and their resulting profits from initial public offerings has also been criticised for favouritism and partiality because of pedigree.
One of these so-called princelings is He Jintao, the son of He Guoqiang. The elder He was the former head for discipline of the Communist Party. The younger though has opted to use the connections to raise US$200 milion or GBP 131 million from investors and the fund is expected to top US$500 million by the middle of 2013.
The fund and similar like it has placed Beijing in a quandary, as the newly installed Chinese Premier Xi Jianping has vowed to tackle corruption in government, with the princelings as the symbol of that corruption.
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