China’s economy has been inconsistent as markets and consumer confidence shift. Private equity deals, however, seem to be on the rise.
Several months ago, Adam Roseman of ARC China wrote:
“The amount of capital going into private equity in China continues to surge, with over $30 billion in new capital raised in 2011. The number of private equity deals in China is also growing quickly.”
Still, the situation is not as simple as it may seem.
“More money in, however, does not necessarily mean more money will come out through IPOs or other exits. In fact, on the exit side of the ledger, there is no real growth, but instead probably a slight decline, as the number of domestic IPOs in China stays constant and offshore IPOs (most notably in Hong Kong and USA) is trending down. M&A activity, the other main source of exit for PE investors, remains weak in China,” he continued.