ASIATODAY.ID, JAKARTA – Private investments, including private equity and venture capital (PEVC), hedge funds and secondaries, are all flourishing in China due to favourable reforms and an accommodating economic environment, according to the ‘Preqin Alternative Assets in Asia-Pacific: Greater China’ report published by Preqin, the global leader in alternative assets data, tools and insights.
Greater China’s PEVC has obtained critical mass, with more than 1.04tn USD assets under management (AUM) as of September 2020, equating to 61% of capital targeting the wider Asia-Pacific
region.
Venture capital remains the dominant strategy in Greater China, accounting for 46% of total PEVC AUM based in the country as of September 2020.
With regards China’s hedge funds industry, monthly cumulative performance has steadily improved,
although many hedge funds still struggle to implement sophisticated strategies outside of equity strategies.
That said, according to investors surveyed by Preqin in November 2020, 57% stated that China presents the best opportunities for hedge funds among emerging markets, the highest percentage of all asset classes.
The report also suggests whilst the secondary private equity market in China is still niche, secondary transactions have risen in recent years with a record number of funds closed and aggregate capital raised.
This includes TR Capital, the Hong Kong-based secondary fund of funds manager, one of the first firms to launch a China-focused private equity secondaries fund, back in 2009. TR Capital has raised a total of $698mn across three funds between 2012 and 2021.
Ee Fai Kam, Head of Research & Data Operations at Preqin, said: “China has solidified its presence on the world stage. Our report shows signs of rapid growth across the board for private investments in China which is fantastic to see. The venture capital market in particular has seen vastly improved
prospects. We expect this trend to continue, given that the pandemic has accelerated a number of technological developments, and venture capital-backed companies are typically at the forefront of these.
“Recent regulatory moves have rightfully caused a stir in the market, but we believe the long term future of China has not dimmed. It is still the world’s single largest market with abundance of talent; investors are going to be hard pressed to find a viable alternative in the near term.”