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The Social and Economic Impact of Private Equity in China
© European Union Chamber of Commerce in China and Bain & Company, Inc.
All rights reserved
www.europeanchamber.com.cn
www.bain.com
2009 Survey
FOREWORD
PRIVATE EQUITY: WHAT’S IN IT FOR CHINA ?
In just 10 years, the venture capital and private equity (PE) industry in China has become a
driving force for economic growth, job creation, innovation and entrepreneurial success.
China has emerged as one of the leading destination for PE capital, and though slowed by
the business-cycle downturn, this trend is continuing through the current turbulence.
This spectacular growth, the entrepreneurial achievements it created and the stellar initial
public offerings (IPOs) it generated on both Foreign and Chinese stock markets have been
well received. Private equity enjoys a positive image in China with stakeholders: government
officials, financial institutions, the general public and, particularly, with entrepreneurs and
management teams.
But private equity’s favorable image in China might in some cases be challenged, as the
ongoing financial turmoil could trigger poor investment returns, questionable management
behavior and failed deals.
This survey is the contribution of the European Union Chamber of Commerce in China, in
partnership with Bain & Company, to evaluate private equity’s role in China at this important
juncture in its development. It applies a unique social and economic perspective to an
industry often regarded as pure financial engineering. In short, it mobilizes rigorous data to
answer the question: “Private equity: What’s in it for China?”
Transparency creates trust. It is our goal to strengthen that trust by explaining how this
important industry works and describing its contributions to China and its people.
This survey, the first of its kind to be conducted in China, shows that PE, both foreign structured
and domestic, has been a driving force in improving companies’ financial performance, social
outcomes and company governance.
We hope all industry participants – fund managers, fund of funds sponsors, government
bodies, professional associations, advisors – will use the data and findings of this survey
extensively. The European Chamber and Bain look forward to participating in future conferences and workshops with industry stakeholders. I would like to express my thanks to the European Chamber team that contributed to
the survey, to its president Joerg Wuttke, for his continuous support; to my vice-chairs, in
particular Roslina Chai; and to Bain & Company and its partners, Michael Thorneman and
Weiwen Han, for producing the underlying analysis upon which this report is based.
Andre Loesekrug-Pietri
Chair, Private Equity and Strategic M&A Working Group
European Union Chamber of Commerce in China
December 2009
In partnership with
TABLE OF CONTENTS
Executive summary
1
Representative panel Social impact of private equity in China
4
Economic impact of private equity in China
10
Background information
14
• Developing people: More jobs, better pay and higher educational attainment
• Increasing innovation: More R&D spending
• Contributing to China’s “Go West” policies: Private equity moves inland
• Boosting growth and profitability: PE creates better-run companies
• Strengthening corporate governance and increasing tax payments
• Changing China’s business model: PE helps lead the shift toward domestic consumption
• Importance of private equity in China
• Private equity glossary
• Methodology • Sources & Notes
• Acknowledgements and contact information
6
6
7
8
10
11
12
14
16
17
19
21
Although private equity is a relatively new phenomenon in China, it is developing rapidly, as
China has become one of the top destinations for PE investment. As with many fast-growing
new industries, the societal changes set in motion by these capital flows raise questions
about whether PE enriches Chinese social and economic development as a whole.
It is in this context that the Private Equity and Strategic M&A Working Group of the European
Union Chamber of Commerce in China and its survey partner, Bain & Company, set out to
examine PE’s social and economic impact in China. This report presents data on key social
indicators, including job creation, spending on research and development and the distribution
of investment to inland provinces. It evaluates key measures of economic performance,
including revenue and profit growth, the stimulation of greater domestic consumption and
tax contributions. The study also aims to be a major source of quantitative information about
private equity in China and to contribute to a constructive debate about its current role and
future development.
Covering the period from 2002 to 2008, the survey included a highly representative panel
of companies, representing more than 50 percent of all private equity investments through
2006. We excluded deals completed after 2006 in order to be able to track post-investment
performance for a period of at least two years. Supplemented by 17 in-depth interviews
with PE-backed company executives, this report reveals private equity’s social and economic contribution through their portfolio companies.
In partnership with
1
European Chamber
This first survey on the social and economic impact of private equity in China
demonstrates that PE firms provide a strong source of support in helping
Chinese companies to grow and contribute to China’s macroeconomic and
development goals. PE firms transfer management know-how to businesses
in their portfolios, build globally competitive companies, improve corporate
governance, develop an innovative private sector, support inland development
and foster domestic consumption. The purpose of the survey was to document
the above mentioned effects based on facts and figures.
Private Equity in China 2009
EXECUTIVE SUMMARY
The Social and Economic Impact of Private Equity in China
2009 Survey
Private Equity in China 2009
• Private equity’s SOCIAL impact on China is notable in three principal areas:
2
First, PE-backed companies created more jobs and paid higher wages and
salaries.
Total employment at private equity-financed companies increased by 16 percent over the
survey period compared with just 8 percent at publicly listed companies. PE-backed
companies also pay significantly higher wages. The gross salary growth rates at PE-backed
companies outperformed those of the listed companies by seven percentage points.With
a 50 percent higher growth rate of employment than their peers for graduates with
associate degree or higher, PE-backed companies are also raising job quality. Private
equity’s qualitative impact on hiring and compensation is helping to move China’s economy toward greater domestic consumption and more social stability.
Second, innovation and efficient spending on research and development
are important goals for PE-backed firms.
Measured as a percentage of revenue, R&D spending at PE-backed companies was more
than two-and-a-half times that of their publicly listed counterparts. Not only do PE investors raise awareness of innovation’s importance at the companies in which they invest, they
also frequently disseminate best practices and increase the productivity of R&D spending.
By helping Chinese companies to climb the value chain, PE firms further the public policy
goal of establishing China as an innovative society.
European Chamber
Finally, PE is a strong contributor to the government’s “Go West” policies.
Not confined to the coastal regions that have attracted disproportionate investment capital,
private equity is flowing across all provinces. The survey found that 42 percent was directed
to companies headquartered in inland provinces.
PE-backed companies achieved a 3 percent higher revenue growth. They also posted a
noteworthy 39 percent average increase in profits compounded annually, 14 percentage
points higher compared with a 25 percent average increase reported by their publicly listed
competitors. These results underscore the efficiency gains achieved within those companies thanks to the involvement of the private equity fund managers. Indeed, beyond the
capital they invest, PE fund managers often engage actively with the managers of their
portfolio companies, introducing them to new management practices, better financial
controls, improved brand development and enhanced corporate governance, among other
disciplines, to improve performance.
Second, PE-backed companies generate higher tax payments than their
publicly listed peers.
Reflecting their stronger financial performance since 2002, PE-backed companies yielded tax
payments that grew at a 28 percent rate compounded annually, 10 percentage points
higher than their benchmark peers. Due to their status as technology companies or as
businesses with foreign investors, many PE-backed companies enjoy more favorable tax
rates than their publicly listed counterparts. Thus, their higher tax payments suggest that
PE shareholders bring improved corporate governance with respect to the disclosure of
taxable income.
Finally, PE-financed firms support the expansion of China’s domestic
consumer goods and retail industry.
Since 2002, PE investments in consumer goods and retail companies have grown at a 77
percent annual rate compounded, making this sector one of the largest magnets for PE
funds in China. Retailers backed by PE investors booked sales growth of 47 percent
compared with just 16 percent for publicly listed retail companies.
We hope that the findings in this survey will be helpful to all stakeholders of the private
equity community as well as to a wider audience. The European Chamber plans to update
the findings on an annual basis to foster a constructive dialogue among industry players,
invested companies and regulatory authorities, and to spread awareness of how private
equity is helping to sustain China’s development objectives.
In partnership with
Private Equity in China 2009
First, PE-backed companies in China booked higher revenues and profits
than their publicly listed counterparts.
3
European Chamber
• Private equity’s ECONOMIC impact on China stands out in three categories:
The Social and Economic Impact of Private Equity in China
2009 Survey
Private Equity in China 2009
REPRESENTATIVE PANEL
To build a representative view, the survey tracked companies
accounting for more than 50 percent of total private equity
investment over the period under investigation.
The survey examined mainland Chinese companies that received at least US$20 million in
financing from foreign or Chinese private equity funds between 2002 and 2006, and tracked
their performance during the period from 2002 to 2008. It excluded deals completed after
2006 to permit tracking of post-investment performance for a period of at least two years. The analysis is based on data obtained on 100 PE-backed companies, accounting for more
than 50 percent of the total value of private equity deals completed during the five-year
period (see chart 1). These companies represent a broad range of industries, company sizes
and geographies (see chart 2). PE investments in real estate companies and in China’s
biggest financial institutions were not included in the sample: a small number of very large
deals in those two sectors completed during the survey period risked biasing the results.
Chart 1 – Value of private equity deals completed during 2002-2006
4
Deal value ($B)
European Chamber
100%
80
14
<20M
60
20-50M
40
50-100M
20
0
7.5
20-50M
50-100M
>100M
Total investments
>100M
Survey sample
100 companies involved
in deals > $20M, 2002-2006
80
60
100
Others
Healthcare
Financial services
Retail
0
10,000+
5,000-9,999
Inland
Consumer goods
Technology, media
and telecom
40
20
100
100
1,0004,999
500-999
Industrial goods &
services
Industry
Coastal
5
0-499
Revenue
(M RMB)
Headquarters location
Comparisons with publicly listed companies
The survey compares the performance of the private equity-backed companies to that of
2,424 public Chinese companies listed on domestic and foreign exchanges such as Shanghai,
Shenzhen, Hong Kong, European and American stock exchanges. The analysis covers a range
of social and economic indicators, including job creation, wages and salaries, tax payments,
employees’ educational attainment, revenue, profits and other metrics.
In partnership with
European Chamber
100%
Private Equity in China 2009
Chart 2 – Survey participant profile
The Social and Economic Impact of Private Equity in China
2009 Survey
SOCIAL IMPACT 1
Private Equity in China 2009
Developing people: More jobs, better pay and higher educational attainment
PE-backed companies have a disproportionately large impact by creating more full-time
jobs, increasing gross compensation and hiring better-educated workforces (see chart 3).
Superior performance in these three areas is one characteristic of a high-performing
company on a fast growth track. Based on in-depth interviews, we observed that this focus
on quality is especially prevalent at the executive level.
Chart 3 – Human capital metrics comparison
Growth rate (%)
30%
27%
6
20%
20
European Chamber
16%
10
8%
PE
backed
Listed
0
Number of
full-time
employees
2%
Gross salary
paid
3%
% of full-time
employees with
associate's
degrees or higher
Increasing innovation: More R&D spending
Private equity funds provided more resources for research and development and helped to
ensure their portfolio companies directed the R&D spending to clearly identified goals. The
survey analysis revealed that PE-backed companies spend 1.8 percent of revenues on R&D,
more than two-and-a-half times the R&D investments made by publicly listed companies
in the survey (see chart 4). PE investors strengthen innovation in two ways: first, by setting
clear innovation priorities for their portfolio companies; second, by introducing best practices
to increase the productivity of their R&D investments.
Private Equity in China 2009
SOCIAL IMPACT 2
A private equity fund manager
7
R&D spending as % of revenue (%)
2.0%
1.8%
1.5
1.0
0.7%
0.5
0.0
Listed
PE backed
In partnership with
European Chamber
Chart 4 – Overall research & development spending as a percentage of
revenue
The Social and Economic Impact of Private Equity in China
2009 Survey
SOCIAL IMPACT 3
Private Equity in China 2009
Contributing to China’s “Go West” policies: Private equity
moves inland
Although they make sizable investments along the coast, private equity funds are also
leaving their imprint on China’s inland provinces (see chart 5). Since 2002, PE investments
have flowed in nearly equal proportion to companies headquartered in inland provinces
and those based in more affluent coastal provinces.
Chart 5 – PE investment by geography for deals >US$20M in 2002-2006
Coastal cities
Inland cities
Heilongjiang
Jilin
8
Xinjiang
Inner Mongolia Beijing
Hebei
Ningxia
Qinghai
European Chamber
100-500M USD
0-100M USD
No investment
during survey period
Henan
Shaanxi
Tibet
Tianjin
Shandong
Jiangsu
Gansu
PE investment
>500M USD
Shanxi
Liaoning
Anhui
Shanghai
Hubei
Sichuan
Jiangxi
Chongqing
Zhejiang
Fujian
Yunnan
Hunan
Guizhou
Guangdong
Guangxi
Hainan
Hong Kong
Taiwan
Chart 6 – PE investment inland vs. costal
Private Equity deal value ($M)
100%
127
936
1,412
2,340
4,472
9,107
5,596
Annual Growth
02'-08'
Private Equity in China 2009
The trend toward inland investments accelerated sharply in recent years, slowing somewhat
in 2008, when inland companies attracted 42 percent of the US$5.6 billion that PE investors
deployed in deals over US$20 million (see chart 6).
80
Coastal
90%
9
60
Inland
20
0
Inland as % of
total investment
2002
2003
2004
2005
2006
2007
2008
45%
11%
56%
38%
55%
64%
42%
In partnership with
86%
European Chamber
40
The Social and Economic Impact of Private Equity in China
2009 Survey
ECONOMIC IMPACT 1
Private Equity in China 2009
Boosting growth and profitability: PE creates better-run
companies
10
Companies with PE shareholders turned in annual revenue growth that was three percentage
points higher than their publicly listed peers. In the year they first received PE investments,
the surveyed companies posted total revenue of RMB 535 billion. Two years later, the same
group generated RMB 867 billion in revenue.
Despite increasing spending for employee compensation, R&D and taxes, PE-backed firms
booked substantially more robust profit growth than the benchmark companies (see chart
7). They posted an average earnings growth rate of 39 percent versus 25 percent for the
publicly listed companies in the survey. In the year that funding was received, the surveyed
companies had net profits of RMB 36 billion. Two years post-funding, profits of the same
group of companies reached RMB 71 billion.
One factor in the steeper rate of profit growth is that PE-backed companies benefit from
the transfer of management know-how. This higher profit growth is generally not achieved
through reduced employment or lower salaries but through efficient management of costs,
information technology and inventories, creating a virtuous circle.
European Chamber
Chart 7 – Revenue and profit growth comparison
Growth rate (%)
50%
39%
40
30
24%
27%
25%
20
PE
backed
Listed
10
0
Revenue
Profit
Interviews with executives at companies that accepted private equity investments revealed
that they valued the role their PE partners played in improving corporate governance.
Major impacts of corporate governance are improvement of account transparency and
tax disclosure. The data show that PE-backed companies yield higher tax payments to the
government, and that these have increased at a rate faster than taxes paid of publicly listed
businesses since 2002. During the period covered by the study, total tax payments of PE-backed companies increased
at a 28 percent compound annual rate, 10 percentage points higher than those of their publicly
listed peers (see chart 8). Due to their status as technology companies or as businesses with
foreign investors, many PE-backed companies often enjoy more favorable tax rates than their
publicly listed counterparts. Thus, their higher tax payments suggest that PE shareholders
bring improved corporate governance with respect to disclosure of taxable income. Finally, it
is important to note that the tax payments made by listed companies come under particularly
close scrutiny, making the results of this benchmark comparison noteworthy.
Chart 8 – Tax payment comparison
Growth rate (%)
30%
20
28%
18%
Total taxes paid
10
0
Listed
PE backed
In partnership with
11
European Chamber
Strengthening corporate governance and increasing tax
payments
Private Equity in China 2009
ECONOMIC IMPACT 2
The Social and Economic Impact of Private Equity in China
2009 Survey
ECONOMIC IMPACT 3
Private Equity in China 2009
Changing China’s business model: PE helps lead the shift
toward domestic consumption
Private equity investors are showing strong interest in China’s consumer goods and retail
industry. While PE investment in China increased by 58 percent since 2002, investment in
the consumer goods and retail industries grew by 77 percent (see chart 9).
Chart 9 – 2002-2008 total deal value growth rate
Deal value growth rate (02-08, %)
100%
77%
80
12
60
58%
40
European Chamber
Mainland China overall
Retail and consumer
goods industries
20
0
Total deal value
PE investments in consumer and retail businesses now rival those made in the traditionally
strong IT and media sectors. Accounting for less than one-third of the value of IT and media
deals in 2002, consumer and retail investments reached parity with them in 2008.
Chart 10 – Revenue growth comparison
Revenue growth relative to listed companies
Private Equity in China 2009
Private equity’s increasing presence in the consumer goods and retail sector is having a positive impact on overall domestic consumption and sales. Retailers backed by PE investors
booked sales growth of 47 percent compared with just 16 percent for publicly listed retail
companies. While consumer goods companies backed by PE investors booked sales growth
of 30 percent compare with 18 percent for publicly listed peers (see chart 10).
100%
13
80
60
40
20
30
18
PE
backed
16
Listed
0
Consumer
Retail
In partnership with
European Chamber
47
The Social and Economic Impact of Private Equity in China
2009 Survey
BACKGROUND INFORMATION
Private Equity in China 2009
Importance of private equity in China
Investing capital raised primarily from institutional investors, private equity funds typically
buy stakes in operating companies. Through boom-and-bust cycles over several decades, PE
has developed into a mature asset class. In the global context, and especially in the United
States and Europe, PE deals in recent years have been concentrated in buyouts, with private
equity investors taking full ownership of the target companies.
Focused on growth capital
By contrast, the private equity industry in China shares characteristics more common to
venture capital. The main reason is that, in a sense, much of China’s economy has been in
high-growth mode. Limited access to expansion capital for smaller and midsize companies
and new enterprises have led entrepreneurs to turn to private equity investors for growth
capital to fill the breach: More than 80 percent of private equity investments were in the
form of capital to finance expansion (see chart 11).
Chart 11 – 2002-2008 total deal value by financing stage in China
14
Deal value (US$ B)
European Chamber
100%
43
80
Turnaround/
restructuring
60
PIPE financing
Buyouts
(MBO/MBI/LBO)
40
Start-up/early
stage/concept
20
0
Pre-IPO/ Expansion
Mainland China
Chart 12 – PE investment as a percentage of total GDP in 2008
Private Equity in China 2009
China is Asia’s top investment destination for private equity
China has become the top destination for private equity investment in Asia over the past
several years. From 2000 through the peak of global economic expansion in 2007, PE deals in
China grew at a compound annual rate of 45 percent. Yet, even as new investments slowed
in 2008 due to the financial crisis, PE activity in China remained strong relative to other Asian
markets. This trend continued through the first half of 2009, as deal volume topped $7.2 billion, nearly matching the total for all of 2008. No other country is recovering as quickly. China
is now on par with the region’s mature economies such as Japan and Australia/New Zealand
as a destination for new investments.
Other indicators point to continued significant growth for PE over the medium term. Today,
PE investments in mainland China already represent 0.17 percent of GDP. Significant growth
can be anticipated if they were to increase to the European level of 0.47 percent of GDP or
the 1.3 percent level in the U.S (see chart 12).
15
PE investment as % of total GDP
1.30
1.0
0.47
0.5
0.17
0.0
GDP
PE investment
Mainland China
$4,320B
$7.3B
US
Europe
$14,280B
$186B
€11,523B
€54B
Evolving trends that could impact China’s private equity industry include, among other
things: the introduction of RMB-denominated funds; the closer alignment of domestic
regulations with international principles; collaboration with global funds to diversify portfolios;
the introduction of industry best practices for limited partners and general partners operating
in China; and higher levels of participation by domestic institutional investors and funds of
funds investing in private equity.
In partnership with
European Chamber
1.5%
The Social and Economic Impact of Private Equity in China
2009 Survey
Private Equity in China 2009
Private equity glossary
European Chamber
16
The most common investment strategies in private equity include leveraged buyouts,
venture capital, growth capital, distressed investments.
• Leveraged buyout: Also called LBO or buyout, this is a strategy financial sponsors employ
to acquire a majority stake in a company, business unit or business assets from the current
shareholders, typically using a combination of equity and debt. The target companies
involved in these transactions are typically mature and generate healthy operating
cash flows.
• Venture capital: This is an equity investment made to finance the launch, early development
or expansion of a business. Venture investing is most often found in the application of
new technology, new marketing concepts and new products that have yet to be proven,
and it usually involves acquiring a minority stake in the business.
• Growth capital: This is an equity investment made most often to acquire a minority
position in a relatively mature company that is looking to expand or restructure operations,
enter new markets or finance a major acquisition without ceding control of the
business.
• Distressed investments: Distressed, or special, situations are a broad category referring
to investments into financially troubled companies. Investors may acquire debt securities
in anticipation of taking control of the company’s equity after a corporate restructuring.
Investors may also provide “rescue financing” typically a combination of debt and
equity to companies undergoing operational or financial challenges.
• Limited Partner (LP): A LP is an investor in a fund. It has a share of ownership in a private
equity partnership but takes no part in managing it. LPs are liable only up to the amount
of their original investment in the partnership.
• General Partner (GP): A GP is a fund manager. He takes part in the daily operations of
the private equity partnership and is personally responsible for its liabilities. • Fund of Funds: It is a pool of capital that invests in several private equity funds. Its
own investors are large institutional investors like pension funds or insurance companies. High net worth individuals and relatively small institutional investors participate in
a fund of funds to minimize the effort and costs related to managing their portfolio.
Benchmark selection
In the Survey, Bain compared the 100 companies that received private equity investments
with 2,424 publicly listed companies having major operations in China. Of these, 1,523
companies listed on the Shanghai and Shenzhen stock exchanges. The study also included
901 Chinese-affiliated enterprises listed on other major exchanges around the world, including
exchanges in Hong Kong, Korea, Singapore, Europe and the United States. To qualify for
inclusion, a company had to be headquartered in China, have China as its primary
geographic location or have the words “China” or “Chinese” as part of its name or in its business
description (see chart 13).
Private Equity in China 2009
Methodology
Chart 13 – Listed companies included in the analysis as benchmark
17
Number of listed companies
80
60
Financial Services
1 ,5 2 3
589
115 197
Total = 2,424
Retail
Healthcare
Consumer goods
Technology, media &
telecom
40
20
0
Industrial goods & services
A shares
H shares
US exchanges
Others
To better evaluate the relative performance of companies that had received private
equity investments, Bain developed a company databases to create benchmarks. This
database included publicly listed companies having major operations in China from six
industries—retail; consumer goods; industrial goods & services; healthcare; financial
services; and technology, media & telecommunications. In order to perform industry-level
analysis, each listed company was assigned to one of the six industries.
In partnership with
European Chamber
100%
Private Equity in China 2009
The Social and Economic Impact of Private Equity in China
European Chamber
18
2009 Survey
Relative performance
To determine the performance of the 100 private equity-backed companies in the survey
relative to the benchmark groups, Bain first calculated the growth in the relevant metrics for
the private equity-backed company and for both benchmarks for the two-year period
beginning from the most recent investment by private equity investors. Thus, the performance
of private equity-backed companies that received their initial infusion of PE capital in 2002
was compared against that of the benchmark group for the identical two-year period, 2002
through 2004. Finally, to aggregate the results from different time periods, the weighted
average of the relative performance of each company over the relevant period was
computed to come up with its overall performance for each metric examined.
In partnership with
Private Equity in China 2009
Chart 1:
Source: AVCJ; Bain analysis
Chart 2:
Source: AVCJ; Bain analysis
Chart 3:
Source: AVCJ; Capital IQ; China statistics yearbooks; company annual reports; Bain analysis
Note: Analysis based on weighted average compound annual growth rate or CAGR (except
for percent full-time employees with associate’s degree or higher, which used weighted
average annual rate) of 100 companies involved in deals above US$20M during 2002–2006;
listed companies benchmark use 2002–2008 weighted average
Chart 4:
Source: AVCJ; Capital IQ; China statistics yearbooks; company annual reports; Bain analysis
Chart 5:
Source: AVCJ; literature search; Bain analysis
Note: Analysis based on companies receiving private equity investment above US$20M
during 2002–2006; Real estates deals are excluded; financial deals excluded are megadeals
of Industrial Bank, Bank of China, China Construction Bank and Bank of Communications
Chart 6:
Source: AVCJ; Bain analysis
Note: Real estates deals are excluded; financial deals excluded are mega-deals of Industrial
Bank, Bank of China, China Construction Bank and Bank of Communications; all other deals
above US$20M during 2002–2008 included
Chart 7:
Source: AVCJ; Capital IQ; China statistics yearbooks; company annual reports; Bain analysis
Chart 8:
Source: AVCJ; Capital IQ; China statistics yearbooks; company annual reports; Bain analysis
19
European Chamber
Sources & Notes
Private Equity in China 2009
The Social and Economic Impact of Private Equity in China
European Chamber
20
2009 Survey
Chart 9:
Source: AVCJ; Bain analysis
Chart 10:
Source: AVCJ; Capital IQ; China statistics yearbooks; annual reports; Bain analysis
Chart 11:
Source: AVCJ; Bain analysis
Note: Data including deals in mainland China from 2002 to 2008, excluding real estate
deals
Chart 12:
Source: AVCJ, Euromonitor, Pitchbook, European PE & VC Association, Bain analysis
Chart 13:
Source: Bain analysis
Private Equity Glossary:
Source: http://biztaxlaw.about.com/od/glossaryl/g/limitedpartner.htm
Source: Private Equity Glossary, Foster Center for Private Equity
First and foremost, to private equity fund managers and management teams who
answered our questionnaire and in-depth interviews
To all people who contributed, from Bain, the European Chamber or outside organizations,
•
and in particular: Ms. Xuan Wang (project leader), Kiki Yang, Stephen Kao, Weining
Wang, Serge Janssens, Gregory van Bellinghen, Tony Robinson, Susan Xu, Joanne
Wood, Lucas Leger, Martin Ready, Landy Yang, Alan Weathley, Adam Dunnett, Dirk
Moens, Alex Bell, Yann Cohen, Lyn Kok, Kathleen Ng, Dominique de Boisseson,
Grace Yao and many others.
•
About the European Union Chamber of Commerce in China The European Union Chamber of Commerce in China was originally founded by 51 member
companies based in China on October 19, 2000. The rationale for the establishment of the
Chamber was based on the need of the European Union and local European businesses to find
a common voice for the various business sectors. Nine years after its foundation, the European
Chamber now has a total of more than 1400 members in seven chapters: Beijing, Chengdu,
Nanjing, Pearl River Delta (Guangzhou and Shenzhen), Shanghai, Shenyang and Tianjin. The
Chamber is recognized by the European Commission and the Chinese authorities as the
official voice of European business in China.
The European Chamber is an independent member-driven, non-profit, fee-based organization
with a core structure of 28 Working groups and 6 Forums representing European business in
China. The Chamber is directed by a President and Executive Committee elected each year by
and from its members.
About the European Chamber Private Equity and Strategic M&A Working Group Established in 2008, the working group is established at a national level and is a platform
of exchange and expertise on PE and M&A related issues for its members, as well as
a communication platform with the Chinese and European governmental authorities on
topics of long-term benefit for the European investment community in China. The objective
is to achieve a level playing field among all market participants and brings an active
contribution to the development of the industry. Its deliverables include the annual Position Paper on PE and strategic M&A, regular meetings
and workshops in several Chinese cities (with professional associations, fund managers,
governmental entities), as well as the annual survey on the Social and Economic impact of
PE in China.
In partnership with
Private Equity in China 2009
Our special thanks go to:
21
European Chamber
Acknowledgement to contributors & contact information
The Social and Economic Impact of Private Equity in China
2009 Survey
Private Equity in China 2009
Members include first and foremost PE and VC fund managers related to Europe or from
funds of European origin, as well as heads of M&A for large corporations. The working group
also includes all advisers working on PE and M&A matters.
European Chamber
22
European Union Chamber of Commerce in China
Website: www.europeanchamber.com.cn
Office C412
Beijing Lufthansa Center
No. 50 Liangmaqiao Road
Chaoyang District
Beijing 100125
PR China
Tel: +86 (10) 6462 2066
Fax: +86(10) 6462 2067
Email: euccc@euccc.com.cn
Bain & Company Website: www.bain.com
Bain & Company China, Inc.
Unit 2407-09, Office Tower 2
China Central Place
No. 79, Jianguo Road
Chaoyang District
Beijing 100025
PR China
Tel: +86 (10) 6533 1199
Fax: +86(10) 6598 9090
Bain & Company (Hong Kong)
30/F, One International Finance Centre
One Harbour View Street Central
Hong Kong
Tel: +852 2978 8800
Fax: +852 2978 8801
Bain & Company China, Inc.
31F, 2 Plaza 66, No. 1366 West Nanjing Road
Jing’An District
Shanghai 200040
PR China Tel: +86 (21) 2211 5588 Fax: +86(21) 2211 5500
Email: Tong.Wu@bain.com
In partnership with
Private Equity in China 2009
23
European Chamber
About Bain & Company
Bain & Company, a leading global business consulting firm, serves clients on issues of strategy,
operations, technology, organization and mergers and acquisitions. The firm was founded
in 1973 on the principle that Bain consultants must measure their success by their clients’
financial results. Bain clients have outperformed the stock market 4 to 1. Bain & Company is
the leading management consulting firm advising private equity funds (three times larger
than the next largest firm). For more information visit: www.bain.com.
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