Investors See Opportunities in China’s $2.45 Trillion Private Equity Market

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What’s new: China’s private equity (PE) industry totaled nearly 16 trillion yuan ($2.45 trillion) as of the end of November, a 16% increase from a year ago, showing that venture investors see new opportunities continuing to arise in the world’s second-largest economy.

Private securities investment funds grew 53% from a year ago to 3.74 trillion yuan, accounting for about a quarter of the PE industry, data released by the Asset Management Association of China showed.

Private equity investment funds expanded 10% to 9.4 trillion yuan, and venture capital funds increased 39% to 1.6 trillion yuan, the data showed.

The background: Venture capital and PE funds are major private investment services that raise vast pools of capital from qualified investors, known as limited partners, to invest in privately owned companies for long-term returns. VC operations target startups, and PE funds focus more on mature companies.

The sector ballooned from scratch in about 20 years, thanks to China’s efforts to liberalize capital markets and restructure public listing systems. The Covid-19 pandemic may have held back many Chinese private equity investment operations, but apparently not the leading players.

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Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

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