From "Making Quick Money" to "Building Long-Term": Trust Companies Rush to LP

Ask AI · What are the deep driving forces behind trust companies’ transformation into equity investment?

Reporter Yang Mengxue from 21st Century Business Herald

Since this year began, trust companies have noticeably accelerated their moves to allocate into equity investment.

Since the start of the year, Minmetals Trust, CITIC Trust, Guomin Trust, and others have successively committed capital to participate in the establishment of equity investment funds and to develop equity investment business.

In fact, this upsurge has not suddenly erupted. Starting in 2022, several companies—including Jianxin Trust, Bank of Communications Guoxin, Shaanxi Guotou Investment Trust—had already begun to test the waters. Moreover, Bank of Communications Guoxin listed private equity business as an important direction, focusing on national strategic industries such as integrated circuits, artificial intelligence, and biopharmaceuticals.

Behind the dense deployment by trust companies this time are needs arising from the incubation of new businesses during the transformation period, as well as demand under the deep conversion of the industry’s profit model, along with the trial-and-error directions explored in a more diversified manner under policy guidance for trust institutions.

However, is equity investment business poised to move from “trial runs” to the mainstream? Insiders believe that broad-based deployment still needs to clear multiple hurdles. The current shortfalls of trust companies lie in the replenishment of professional talent and the establishment of assessment mechanisms. And from a longer-term perspective, how to further deepen professional specialization and innovate product structures is also a long-term challenge.

From filling talent and mechanism gaps to pursuing specialization and innovation over the long run, trust companies’ path into equity investment is currently searching for answers between breaking through and deepening focus.

Since this year began, multiple trust companies have been laying out equity investment business.

For example, Minmetals Trust, this year, has already implemented 4 venture capital funds, including Suzhou Shengxin Qixing Phase I Venture Capital Partnership Enterprise (Limited Partnership), Shenzhen Shunrui Zhiyuan Investment Partnership Enterprise (Limited Partnership), Shenzhen Qihang Innovation Investment Partnership Enterprise (Limited Partnership), and Foshan Ruidexizhiren Equity Investment Partnership Enterprise (Limited Partnership), all of which invest in unlisted companies.

Among them, the most recently implemented Suzhou Shengxin Qixing Phase I is a venture capital fund jointly landed with Shanghai Shenghe Private Fund Management Co., Ltd.; the fund size is 10 billion yuan, and Minmetals Trust has subscribed 9 billion yuan.

From the start of the year to now, CITIC Trust and Guomin Trust have also made some deployments in this area.

In February, CITIC Trust also, through its subsidiaries CITIC Juxin (Beijing) Capital Management Co., Ltd. and Tianjin Juxin Tian’an Equity Investment Partnership Enterprise (Limited Partnership), jointly contributed 300 million yuan to participate in the establishment of Hangzhou Xiaoshan Jinkai Gongrong Juxing Equity Investment Partnership Enterprise (Limited Partnership).

In January, Guomin Trust subscribed 98.0413% of the equity interests of the Caida Guomin Kangheng (Xiong’an) Sci-Tech Innovation Equity Investment Fund Partnership Enterprise (Limited Partnership), contributing 50.0545 million yuan.

In fact, since 2022, there have been trust companies testing the waters in the field of equity investment. According to an incomplete整理 by reporter from 21st Century Business Herald, in addition to the aforementioned trust companies, previously Jianxin Trust, Bank of Communications Guoxin, Shaanxi Guotou Investment Trust, Daye Trust, Huaxin Trust, and many other trust companies have also had related business take shape.

For example, Bank of Communications Guoxin, etc. have already listed equity investment-related business as an important business direction. The annual report mentioned by Bank of Communications Guoxin in its previous year refers to major business segments including private equity business: using its own funds to invest in industry PE funds or to acquire existing LP stakes; or using private fund subsidiary companies as fund managers to initiate and establish private equity investment funds to invest in equity of high-growth and quality enterprises, focusing on state-supported key industries such as integrated circuits, artificial intelligence, new energy, new materials, biopharmaceuticals, and high-end equipment manufacturing.

According to the “2023 Special Research Report on the Trust Industry,” there are mainly three models for trust companies to participate in equity investment business:

First is the trust plan direct investment model, which means that a trust company raises funds from qualified investors by issuing and establishing equity investment trust plans, and then directly invests the trust funds into the invested enterprises.

Second is the model where the trust company participates as an LP in a private equity investment fund. This model means the trust company, as a limited partner (LP), uses the funds raised under the trust plan together with other LPs to jointly establish a limited partnership fund with the general partner (GP). Through the limited partnership structure, it indirectly invests in one or more unlisted enterprises.

Third is the model where a trust company establishes a PE subsidiary to carry out equity investment business. However, currently only a small number of trust companies established PE subsidiaries to carry out equity investment business between 2011 and 2016; since 2017, there have been no new trust PE subsidiaries approved.

A trust institution source in East China told the reporter that the relatively mainstream and mature model at present is for trust companies to participate as LPs, indirectly achieving investment in unlisted enterprises through limited partnerships. Under this model, the trust company only participates in the profit share according to the agreed ratio and does not take part in the enterprise’s day-to-day operating and management. For trust companies, the risk is more controllable: it bears limited liability only up to the amount it contributes.

As the industry transformation moves into deeper waters, the income structure of trust companies is undergoing a conversion from “making quick money” to “long-term allocation.” One notable trend is that the share of revenue from proprietary businesses continues to increase.

A trust company’s proprietary business refers to activities carried out using the company’s own capital, ‌mainly including deposits with other financial institutions, interbank lending, loans, and investments, etc.‌ Proprietary business refers to business activities that trust companies conduct by using their own capital, and it is relatively independent from trust business.‌

In a research report on trust operations, Yunnan Trust mentioned when analyzing 2025 trust-company financial report data that the industry’s income structure shows significant differentiation, and the profit model undergoes structural adjustments; trust business and proprietary business revenue exhibit a pattern of rising and falling alternately. In 2025, proprietary business revenue reached 31.375 billion yuan, accounting for nearly half of the total revenue of the trust industry, up 73.06% year-on-year, with a substantial jump. The proportion of trust business revenue and proprietary business revenue shifted from the stable 7:3 ratio in prior years to nearly 5:5 currently.

Yunnan Trust believes that, in the profit conversion from trust business to proprietary business, this is not only a stage-specific characteristic of industry transformation, but also a structural adjustment of the profit model. On the one hand, business lines such as negotiable instrument trust business and asset management service trusts need trust companies to invest in trading, operations, systems, and investment research and analysis upfront, requiring a certain business incubation period; the industry is still in a stage of building transformation capabilities, and in the short term trust business revenue is under pressure. The sharp growth in proprietary business revenue mainly benefits from the positive returns of the capital markets. In 2025, trust companies that had some deployment in the capital markets all achieved a significant increase in proprietary business revenue.

One trend worth noting is that over the coming period, proprietary business revenue may to some extent bear the income pressure of trust companies. Multiple industry insiders also mentioned similar views in interviews. Against this backdrop, allocating into equity investment business is also seen as one of the ways for trust companies to explore diversification during their transformation period.

Asset management researcher Yuan Jiwei analyzed for the reporter that trust companies’ participation in equity investment funds mainly stems from two considerations. On the proprietary business side, during the innovation and transformation of trust business, proprietary business assumes a greater responsibility for generating revenue. Through PE investment, it can optimize asset allocation and also improve investment returns, which is an important way to support and serve the real economy. On the trust business side, in the past, trust products were mainly fixed-income categories with relatively limited product variety. In a low interest rate environment, investors need some asset management products with higher returns, and trust companies are also actively exploring PE investment, hoping to expand in equity-based trust products.

A research report from State Investment & Taikang Trust mentioned that developing equity investment business for trust companies is expected to realize value in four areas: first, achieving a transition in the business model from indirect financing to direct financing; second, realizing a change in management philosophy from a short-term creditor mindset to a long-term shareholder mindset; third, effectively contributing to the development of the real economy by providing integrated financial needs through a combination of investment and loan; and fourth, cultivating new business growth points under the backdrop of regulatory “double reduction.”

The source from a certain trust company in East China mentioned above said that, under multiple policy guidance such as serving the real economy and advocating patient capital, trust companies’ engagement in equity investment business is also an important means to match long-term capital needs and obtain long-term investment returns. But for trust companies, because these businesses have the characteristics of “high risk, high volatility, and high returns,” they also impose higher requirements on the company’s own resources and team allocation. This means decisions must be made prudently based on the company’s own professionalism and risk preferences.

With multiple institutions acting frequently, is equity investment business expected to move toward the mainstream?

Yuan Jiwei believes that equity investment is still a relatively high-risk and high-return area, and that in itself, there are already relatively many equity investment institutions in our country; trust companies are still in an exploration and trial stage in the short term, making it difficult to develop on a large scale. In particular, trust-side equity investment also needs to develop toward “premiumization” and “specialization/characteristics,” otherwise it will be hard to compete on the same stage as well-known PE institutions.

The source from a certain trust institution in East China also pointed out similarly that, based on factors such as professional team configuration and resource allocation, business development still needs further improvement in foundational systems and other aspects.

Recently, there has been a proactive step on the policy front: equity trust property registration pilot programs, etc., have already been piloted in cities including Beijing and Shanghai. Liao He Kai believes that, as basic institutional arrangements such as equity trust property registration pilots, their immediate promotional effect is limited. However, they reduce legal risks and transaction costs arising from unclear property rights, and thus indirectly and long-term promote the stable development of related equity investment businesses, clearing away concerns about the inflow of funds.

Liao He Kai believes that, after the business and institutional rules have been磨合, the equity investment business of trust companies is expected to enter a new phase of standardization and scale.

In the view of industry insiders, when trust companies currently lay out equity investment, first they must clear two hurdles: talent and mechanisms.

Yuan Jiwei told the reporter that when laying out equity investment business, a trust company’s core still has to solve the problem of professional talent—conduct deeper research into industries and enterprise operations, thereby effectively managing and controlling risks; it also needs relatively健全 mechanism safeguards. After all, this is completely different from fixed-income products—how to assess and incentivize business is also extremely important.

From a longer-term perspective, specialized division of labor, product innovation, and digital empowerment determine how far this path can go.

Liao He Kai believes that in the future, trust companies’ equity investment will show three major trends: deepening specialized division of labor, innovating product structures, and enabling digital capabilities. Trust companies need to build a much larger professional team, leverage their advantages in equity investment, deeply integrate multiple trust business formats to enhance the depth of trust services, and use diversified financial tools such as asset securitization, mergers and reorganizations, and mezzanine financing, to provide clients with diversified financing solutions and comprehensive trust service solutions.