A Bridge on Economic Issues between China and the World
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The Impact of Patient Capital
Yingxiang Li, Tong Liu, Ting Xu, Nov 11, 2026Does the patience of venture capital come from its ultimate investors or from the fund managers who invest on their behalf? Combining a randomized survey experiment with Chinese venture capital (VC) managers and a 2014 reform that opened RMB-denominated VC funds to domestic insurers, we show that investor horizons pass through to fund strategies. After insurers entered, RMB funds held portfolio companies longer, backed younger startups, and saw more successful exits and patenting. This pass-through weakens when investors can sell their fund stakes in a liquid secondary market, a caution for current efforts to open private markets to retail investors.
