Private equity in China

Over the past five years, China's private equity market has been the fastest-growing in the world, and produced some of the most notable investment successes. Despite recent downturns in stock markets and private equity activity elsewhere in the world, China remains a very active market for pre-IPO investment. China's government has recently decided to invest up to $15 billion in private equity deals, using funds from its state social security investment plan.
Private Equity investment in China frequently operates like venture capital investing in the US - with investors buying a minority stake in a fast-growing fully-private company. Leverage is rarely used. The private equity investment is used to increase profitability, and so increase the value of the business when and if it successfully lists its shares on the stock market, usually several years later. The private equity firms also lend a lot of expertise to the companies they invest in. They will often assist the company in improving its operations, strategy, marketing and financial management. The current emphasis of many private equity companies in China is on finding Chinese private companies with a strong presence and high growth in China's domestic market, rather than on companies dependent on exports.
Several of the large global Private Equity firms, including Carlyle Group, TPG Capital and Kohlberg Kravis Roberts, have also made investments in China, but these have generally been in large, formerly state-owned companies.
Among the most active, successful and best-managed private equity firms focusing on China are /:
*SCGC-Shenzhen Capital Group, Ranked as number 1 fund in China in 2008 by Zero2IPO
*China Renaissance Capital Inc.
*CDH
*Hony Capital
*HSBC Private Equity
*EQT Partners
*Milestone Capital
*CIVC-a JV Fund with SCGC
*Infinity Group
Among the most active and successful investment banks working in the private equity field in China are :
*China First Capital
*New Access Capital

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