PE funds investment slumps in 1st quarter
By Louise Ho |
April 7, 2012, Saturday
|
Print Edition
Print Edition
TWENTY-EIGHT private equity funds in China completed fundraising in the first quarter of this year, down 36.4 percent compared with the fourth quarter of last year, a research report revealed yesterday.
The total amount of funds raised in the first quarter was US$2.9 billion, only a quarter of the figure raised in the final quarter of last year, according to the report by research institute Zero2IPO. The number and amount of PE funds in the China market has dropped for two consecutive quarters, the report noted.
"Apart from the Chinese New Year holiday, the more important factors that contributed to a slump in fundraising activities is a cautious attitude by investors, tightened market liquidity and increasing difficulty in fundraising by institutions," Zero2IPO researcher Fu Zhe suggested.
In a breakdown of the 28 funds, 24 were growth funds, which raised US$2.4 billion; three were real estate funds, raising US$405 million; and a small merger fund that managed US$57 million.
In the first quarter, the energy and mining sector received the most PE investment, with 16 companies gaining such funds, up from five in the same period of last year.
The manufacturing industry was second with 13 cases of funding, and real estate sector third with 11 cases.
But in terms of amount, real estate, retail and biotechnology and medical health were the top three industries, with investment amounting to US$63.6 million, US$36.4 million and US$33.2 million, respectively.
The majority of the PE funds were in yuan - 25 of the 28 new funds - down from the 37 in the fourth quarter of last year.
The total amount of funds raised in the first quarter was US$2.9 billion, only a quarter of the figure raised in the final quarter of last year, according to the report by research institute Zero2IPO. The number and amount of PE funds in the China market has dropped for two consecutive quarters, the report noted.
"Apart from the Chinese New Year holiday, the more important factors that contributed to a slump in fundraising activities is a cautious attitude by investors, tightened market liquidity and increasing difficulty in fundraising by institutions," Zero2IPO researcher Fu Zhe suggested.
In a breakdown of the 28 funds, 24 were growth funds, which raised US$2.4 billion; three were real estate funds, raising US$405 million; and a small merger fund that managed US$57 million.
In the first quarter, the energy and mining sector received the most PE investment, with 16 companies gaining such funds, up from five in the same period of last year.
The manufacturing industry was second with 13 cases of funding, and real estate sector third with 11 cases.
But in terms of amount, real estate, retail and biotechnology and medical health were the top three industries, with investment amounting to US$63.6 million, US$36.4 million and US$33.2 million, respectively.
The majority of the PE funds were in yuan - 25 of the 28 new funds - down from the 37 in the fourth quarter of last year.
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