PE market to grow slowly after robust 2014
CHINA’S private equity market is expected to grow by a slower pace this year after a record-breaking 2014, according to an industry report.
It was a year of robust growth last year for PE investors in China who invested in US$41 billion worth of deals, a 173 percent surge year on year and 32 percent higher than the market’s peak in 2011, according to Bain & Co’s annual China private equity market overview released yesterday.
The number of deals surged to 350, exceeding the market’s five-year average by 30 percent, the report said. The value of funds that exited also tripled from a year earlier to US$61 billion.
The strong performance was driven by mega transactions in the Internet and technology sectors, which accounted for 40 percent of the total deal value, the consulting firm said.
A resumption of initial public offerings last year which included those of Alibaba Group, CGN Power and JD.com also propelled the growth, it said.
However, Bain said it would be difficult for PE investors to maintain the momentum for the rest of this year as it cited factors including fierce competition and an economic slowdown.
Kiki Yang, a Bain partner in Hong Kong and a leader in the firm’s Private Equity Practice, said slower economic growth and stiff competition “will make it increasingly harder to generate market-beating returns in the future.”
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