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VC and PE firms wary of mainland

VENTURE capital and private equity firms remained cautious due to the financial crisis as their investments dropped to US$156 million in April on a monthly basis, Zero2IPO Research Center said in a report yesterday.

Investment in the Chinese market fell about 58 percent from a month earlier, according to figures compiled by Shanghai Daily as the research center didn't provide a comparison.

A total of 17 firms invested in 14 cases on the Chinese mainland in the period, with no single investment exceeding US$100 million.

"The government attached more importance to venture capital and private equity firms with the announcement of a stimulus package to support 10 key industries," the report said.

However, time is needed for the equity market to heat up as it is unclear when new share sales will resume and a growth enterprise board is launched, it said.

The government suspended new share sales after the stock market plunged nearly 70 percent last year, which narrowed exit channels for venture capital and private equity firms.

Investments in the energy and retail industries accounted for 90 percent of the total in the period. Clean technology absorbed 3 percent of total investments, the report said.

Venture capital and private equity firms set up eight funds - five of which are government backed - last month that plan to collect US$1.47 billion from the mainland.


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