The view on China’s private equity market at the moment is subdued, according to pionline. Citing Preqin data, the report says that competition and a depressed IPO market may dash expectations of healthy returns, and cause some fund managers to fail in their efforts.
China-focused funds worth a total of USD 30.9 billion were raised in 2011, which is leading to greater competition for investing in new deals. There was a little over USD 6 billion in VC and PE-backed IPOs in China as of Oct. 9, according to Preqin, which is close to last year’s total, but it is a “steep drop” from private equity-backed IPOs worth USD 10 billion seen in 2010.
The article concludes that the PE market in China is maturing and that the correction currently underway is a part of that process.