Deloitte Survey: Investors Bullish on China Private Equity Fund

The “China Private Equity Confidence Survey” issued by Deloitte & Touche 14 in Beijing shows that investors are optimistic about China’s private equity funds (PE ) market and RMB funds. The survey also shows China’s growing private equity funds will change the existing market structure.

The work of the international research firm Deloitte in relation to China’s private equity market found that 79% of the respondents expected the next 12 months that private equity investment activities in China will be heating up.

Deloitte China, the North China managing partner of the company’s private equity services, pointed out that the confidence many private equity investors in the China market is high, due to many factors, including the current rising economic trend, the open market recovery, growth in domestic RMB funds, and to private equity funds as a source of financing for growing businesses. The most striking of the factors is the rapid rise and growth of RMB funds.

Despite the confidence in China’s private equity fund market, the survey revealed that only half of the respondents expect plenty of capital.  Despite this, continuing support for privatization of state-owned enterprises, is set to increase. Industry, consumer, retail trade activities in the next 12 months will be the majority of those business that will go private.  This is followed by electricity, energy, the mining industry and the pharmaceutical, biotechnology and health care industries.

Andrew Zhu Deloitte Tax and Business Advisory Partner, pointed out that as China’s private equity fund market matures, the past focus on investment activities in the coastal areas to the mainland will be more substantial along the lines of second and third tier cities infiltration and this may even include some provinces and cities in the western hinterland, which will provide more competition to the Chinese mainland market.