Preqin Territory Guide
Private Equity and
Venture Capital in
Greater China 2023
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
2
Private equity
and venture capital
in Greater China
Private equity and venture capital (PEVC) industries in Greater
China had a challenging year in 2022. China continued to
impose strict COVID-19 restrictions and lockdowns, while
supply chain disruption and geopolitical conflict also added
to investor caution.
As a result, fundraising by Greater China-based PEVC
fund managers slowed significantly during the year, although
well-established funds still managed to raise substantial sums
of capital. The 10 largest funds raised more than two-thirds of
the year’s total.
PE deals have grown in number and value consistently
since 2018, and peaked in 2022. Interestingly, while IPOs
remained the preferred exit option for Chinese companies,
the number of secondary buyouts peaked in 2021 for firms
looking for alternative exit opportunities amid a challenging
market environment. As the IPO process in the US for Chinese
companies remains uncertain, in the US for Chinese companies,
more are finding success listing in Hong Kong and China’s
A-share market.
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
3
Charts in this guide
Figure number
Chart title
Page number
Assets under
management
1
Greater China-focused PE assets under management,
2010 – Q2 2022
8
2
Greater China-focused VC assets under management,
2010 – Q2 2022
8
3
Greater China-based PEVC fundraising, 2010 – 2022
8
4
Top 10 PEVC funds closed, 2021 – 2023
9
5
Number of active investors in Greater China-based
PEVC by type, 2018 vs. 2023
10
6
Number of active PEVC fund managers, 2018 vs. 2023
10
7
Annual number and value of PE deals, 2017 – 2022
11
Investors and
fund managers
Deals
8
Annual number and value of VC deals, 2017 – 2022
11
9
Annual number of PE-backed buyout deals by
industry/sector in Greater China, 2017 – 2022
11
10
Annual number of PE-backed buyout deals by type
in Greater China, 2017 – 2022
12
11
Top 10 PE-backed buyout deals announced and
completed in Greater China, 2021 – 2023 YTD
13, 14, 15
12
Most active buyers by number of buyout deals,
2017 – 2023 YTD
10
13
Annual number and value of secondary buyout deals in
Greater China, 2017 – 2022
17
14
Annual number of PE-backed secondary buyout deals
by industry/sector in Greater China,
2017 – 2022
17
15
Annual aggregate secondary buyout deal value by
industry/sector in Greater China, 2017 – 2022
17
16
Top 10 PE-backed secondary buyout deals
announced and completed in 2021 – 2023 YTD
18
17
Annual number of exits by type, 2017 – 2023 YTD
19
Secondary
buyouts
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
Figure number
Chart title
4
Page number
Performance
18
Greater China-based PEVC: rolling 1, 3 and 5-year
horizon IRRs
19
19
Greater China-based PEVC: median net IRRs and
quartile boundaries by vintage year, 2010 – 2019
20
20
Greater China-based top-performing funds
(vintages 2009 – 2019)
20
21
Most consistent top-performing Greater China-based
PEVC fund managers
21
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
5
Private equity
and venture capital
in Greater China:
key figures
$539bn
$956bn
Greater China-focused PE assets
under management
Greater China-focused VC assets
under management
50%
$418mn
Increase in number of active
PEVC fund managers between
2018 and 2023
Average size of PEVC funds raised
in Greater China in 2022, up 17%
from 2021
$58bn
15
Aggregate deal value of PE deals in
Greater China in 2022, 30% higher
year on year and almost double
that of 2020
Number of secondary buyouts
in 2021, a record high and five
times that of 2020 and 2022’s
yearly figures
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
Fundraising
continued to
decline in Greater
China but PE deal
activity gained
momentum
6
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
7
China's PEVC
industries:
Year in Review
With firms under LP
pressure to deliver
returns, the secondary
buyout market in Greater
China gained momentum
in 2021, while 2022 saw
fewer but larger deals
China had an eventful year in 2022. The country remained in lockdown to contain
the spread of COVID-19 while the rest of the world returned to what life was like
before the pandemic. Residents in major cities such as Beijing, Shenzhen, and
Shanghai had to go for regular, mass COVID-19 testing until the early winter of
2022, as well as adhering to other strict rules. The restrictive and persistent zeroCOVID policies led to unhappiness that culminated in widespread protests toward
the end of the year. This prompted the government to stop mass testing among its
population and lift quarantine requirements for international arrivals from January
8, 2023.
Fundraising remains challenging
Persistent lockdowns in 2022 did not help to improve investor sentiment toward
China’s PEVC industries, which were already impacted by regulatory changes
in 2021. Fundraising became even more challenging last year. Aggregate capital
raised by Greater China-based PEVC fund managers fell to just $36.8bn in 2022,
significantly lower than the average of $148.9bn raised between 2019 and 2021 (Fig.
3). The number of funds closed also dropped to just 100 funds, compared to 375 in
2021 and 682 in 2020.
However, average PEVC fund size was at a record $418mn in 2022 (Fig.
3). Notably, well-established funds continued to raise large amounts of capital,
while smaller or first-time funds had a harder time. The 10 largest funds closed in
2022 accounted for $24.9bn, or a disproportionate 68%, of total capital raised. The
largest fund close was that of BPEA EQT’s $11.2bn eighth pan-regional buyout fund
in September 2022.
The performance of China’s PEVC funds took a hit between 2021 and
2022. The 1-year horizon IRR entered negative territory at -2.4%, while the 3-year
and 5-year horizon IRRs to June 2022 were above 12% (Fig. 18).
Overall, Greater China-focused PE assets under management (AUM)
reached $539.0bn as of June 2022, a slight increase of 1.6% in the six months from
December 2021. Dry powder fell to $87.2bn from $104.7bn in the same period,
signifying that managers have good avenues to deploy capital (Fig. 1).
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
500
400
300
200
Jun-22
Dec-21
Dec-20
Dec-19
Dec-18
Dec-17
Dec-16
Dec-15
Dec-14
Dec-13
Dec-12
0
Dec-11
100
Dec-10
Assets under management
($bn)
600
Unrealized value ($bn)
Dry powder ($bn)
Source: Preqin Pro
Fig. 2: Greater China-focused VC* assets under management,
2010 – Q2 2022
1,200
1,000
800
600
400
Unrealized value ($bn)
Jun-22
Dec-21
Dec-20
Dec-19
Dec-18
Dec-17
Dec-16
Dec-15
Dec-14
Dec-13
Dec-12
0
Dec-11
200
Dec-10
Assets under management
($bn)
Dry powder ($bn)
Source: Preqin Pro
Fig 3: Greater China-based PEVC fundraising, 2010 – 2022
350
1,600
300
1,400
1,200
250
1,000
200
800
150
600
100
400
50
No. of funds
2022
2021
2020
2019
0
2018
2017
2016
2015
2014
2013
2011
0
2012
200
Aggregate capital raised ($bn)
1,800
2010
The 10 largest funds closed in 2022
accounted for 68% of total capital
raised
Fig. 1: Greater China-focused PE assets under management,
2010 – Q2 2022
No. of funds
$24.9bn
8
Aggregate capital raised ($bn)
Source: Preqin Pro
*Venture debt funds are included in the above analysis.
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
9
Family offices increase allocations
Despite lower fundraising figures in the last two years, the number of active
investors in Greater China’s PEVC industries has increased by 70% compared with
2018 (Fig. 5). This is partly because the China Securities Regulatory Commission
began to allow full foreign ownership of domestic fund management companies in
2019, leading to a flood of foreign capital into China.1
Interestingly, the breakdown of investors shows that family offices have
been allocating more to these asset classes, with their number more than doubling
from 65 in 2018 to 154 in 2023. According to a survey of 45 Chinese family offices
carried out by UBS Wealth Management and the Shanghai Advanced Institute
for Financial Research and published in November 2022, PE investment takes up
around 40% of total investment capital, compared to 21% among international
family offices.2
PE deal activity stays strong
Greater China’s PE-backed deal activity continued its upward climb to reach a
record of almost $58.0bn in aggregate deal value in 2022, up 30% year on year
(Fig. 7). Most of the deals were in the raw materials & natural resources,
information technology, consumer discretionary, and healthcare sectors.
http://www.csrc.gov.cn/csrc_en/c102063/c1606308/1606308/files/CSRC%20Annual%20
Report%202019.pdf
1
2
https://www.chinadaily.com.cn/a/202211/24/WS637eca1da31049175432b94b.html
Fig 4: Top 10 PEVC funds closed, 2021 – 2023
Firm
Fund size ($bn)
Fund type
Geographic
focus
Final
close date
Hillhouse Capital Management
18.0
Balanced
China
May-2021
National Green Development Fund
Management
13.7
Fund of funds
China
Apr-2021
Baring Asia Private Equity
Fund VIII
BPEA EQT
11.2
Buyout
Asia
Sep-2022
China State-owned
Enterprises Reform Fund
CCT Fund Management
10.9
Fund of funds
China
Apr-2021
Boyu Capital
5.0
Growth
China
Jul-2021
Ningbo State-owned and
State-owned Enterprise Reform
and Development Fund of Funds
3.1
Fund of funds
China
Jan-2021
FountainVest Partners
2.9
Growth
China
Jun-2022
IDG Capital
2.9
Growth
China
Aug-2021
Qiming Venture Partners
2.5
Venture
(general)
China
Jul-2022
Asia Alternatives Management
2.0
Fund of funds
Asia
Jan-2022
Fund
Hillhouse Fund V
National Green
Development Fund
Boyu Capital Fund V
Ningbo Major Industry
Development Fund of
Funds
FountainVest Capital
Partners Fund IV
IDG Breyer Capital Fund
Qiming Venture
Partners VIII
Asia Alternatives Capital
Partners VI
Source: Preqin Pro. Data as of January 2023
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
“ PEVC dealmaking in 2023 in
China will be stronger than 2022,
with major emphasis on deeptech investments, such as in
semiconductors, energy, smart
manufacturing, new materials,
and healthcare tech, etc. The
earnings outlook of PE deals will
continue to be challenging; hence
the secondary buyout market
and assets transfer in China
between PE firms depends on
whether the value of the assets
can be agreed.
10
On the other hand, VC deals fell in 2022. A total of 4,563 deals were completed
with an aggregate deal value of $68.9bn − half of 2021’s figure and 13% lower than
in 2020 (Fig. 8). In 2021, the government banned the private tutoring industry and
introduced stricter regulations around cybersecurity, data security, false advertising
and the use of online gaming by children. This resulted in fewer deals being
completed in the internet sector compared to between 2017 and 2019. Sectors
with the greatest number of deals in 2022 were automobiles, software, energy
storage & batteries, biotechnology, and semiconductors.
More secondary buyouts in recent years
With limited exit avenues and high levels of dry powder waiting to be deployed,
PE firms have increasingly been selling assets to other PE companies. In 2021,
there were a record 15 secondary buyout deals amounting to $1.3bn (Fig. 13). Seven
of these deals were in the consumer discretionary sector.
“
1,500
1,200
900
600
2018
Others*
Bank/Investment
bank
Fund of funds
manager
Government
agency
Sovereign wealth
fund
Endowment plan
Foundation
Wealth manager
Family office
Public pension
fund
0
Insurance
company
300
Asset manager
No. of active
investors
Fig. 5. Number of active investors in Greater China-based PEVC by
type, 2018 vs. 2023
2023
Source: Preqin Pro
Fig. 6: Number of active PEVC fund managers, 2018 vs. 2023
6,000
No. of fund managers
Chua Wee Liang
Partner
Cowin Capital & General
Partner of Cowin
USD Funds
5,000
4,000
3,000
2,000
1,000
0
2018
2023
Source: Preqin Pro. Data as of November 2022
*Others includes PE firms, investment companies, and investment trusts
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
11
Fig. 7: Annual number and value of PE deals, 2017 – 2022
No. of deals
250
60
50
200
40
150
30
100
20
50
10
0
0
2017
2018
No. of deals
2019
2020
2021
2022
Aggregate deal value ($bn)
Source: Preqin Pro
9,000
160
8,000
140
7,000
120
6,000
100
5,000
80
4,000
60
3,000
2,000
40
1,000
20
0
Aggregate deal value ($bn)
No. of deals
Fig. 8: Annual number and value of VC deals, 2017 – 2022
0
2017
2018
No. of deals
2019
2020
2021
2022
Aggregate deal value ($bn)
Source: Preqin Pro
Fig. 9: Annual number of PE-backed buyout deals by industry/sector
in Greater China, 2017 – 2022
No. of deals
The increase in the number of
active investors in Greater China's
PEVC industries since 2018
70
Aggregate deal value ($bn)
70%
300
300
250
200
150
100
50
0
2017
2018
Business services
Energy & utilities
Healthcare
Information technology
Real estate
2019
2020
2021
2022
Consumer discretionary
Financial & insurance services
Industrials
Raw materials & natural resources
Telecoms & media
Source: Preqin Pro
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
activity on both deal and
fundraising fronts as Asia
continues its path to recovery
from the COVD-19 pandemic,
and are cautiously optimistic
given market conditions are still
soft compared to the heights of
early 2021. As for deals, we not
only need to source outstanding
companies, but also ensure that
deal terms are attractive enough,
considering the continued
volatility and risks in the current
market. As such, we will also
be focused on secondary
opportunities of top-tier
companies with shareholders
needing to − or being pressured
to − exit.
“
Shaun Lim
Head of HOPU-Arm
Innovation Fund
HOPU Investments
The value of deals in 2021 was second only to 2018’s $5.1bn. This year was an
outlier thanks to one mega deal − the $4.1bn acquisition of Shanghai Baosteel
Gases, a manufacturer of iron and steel products, by Hong Kong-headquartered
alternative investment firm PAG.
In 2022, three secondary buyouts occurred in China. These deals were
spread out evenly in the business support services and packaging sectors. They
included Brookfield Asset Management’s acquisition of clothing label maker
Trimco Group from Affinity Equity Partners for an enterprise value of $850mn in
November, and BPEA EQT’s $2.8bn acquisition of Hong Kong-based corporate
secretarial services provider Tricor Services.
IPOs still the preferred way to exit
In 2021 and 2022, the ability to exit via IPO on US stock exchanges was uncertain
as China’s cybersecurity regulators were strictly supervising Chinese companies
issuing securities overseas. Ride-hailing platform operator Didi delisted from the
New York Stock Exchange (NYSE) in June 2022 after just a year, citing the need to
complete the ongoing cybersecurity review by Chinese authorities.
At the same time, the US Securities and Exchange Commission (SEC)
mandated that Chinese-listed firms on US stock exchanges, such as tech
behemoth Alibaba, use auditors that permit US regulatory oversight or they would
have to delist. In a rare concessionary move, the Chinese Securities Regulatory
Commission signed an agreement with the US Public Company Accounting
Oversight Board to allow cross-border audit oversight cooperation in August 2022.
With the reopening of China from January this year, on-site inspections could
also resume.
Fig. 10: Annual number of PE-backed buyout deals by type in Greater
China, 2017 – 2022
300
250
No. of deals
“ We are starting to see positive
12
200
150
100
50
0
2017
2018
2019
Add-on
Leveraged buyouts
Public to private
2020
2021
2022
Growth capital
PIPE
Recapitalization
Source: Preqin Pro
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
13
Fig. 11: Top 10 PE-backed buyout deals announced and completed in Greater China, 2021 – 2023 YTD
Portfolio company
Jiangsu Hengli
Hydraulic Co., Ltd
New Founder Holding
Development Company
Limited
Huarong International
Financial Holdings
Limited
51job, Inc.
Investment
type
Deal size
($bn)
Location
Industry
PIPE
Guotai Junan Securities Asset
Management, Abu Dhabi Investment Authority, Goldman Sachs,
China Europe Fund Management,
GIC,etc.
29.8
China
Industrial
machinery
Dec-22
Buyout
Ping An Insurance Group
7.5
China
Business
support
services
Dec-22
PIPE
China Insurance Rongxin Private
Equity Fund, China Cinda Asset
Management, CITIC Group, ICBC
Capital Management, China Life
Insurance
6.5
China
Financial
services
Dec-21
Public to private
Ocean Link, DCP Capital, Recruit
Holdings
4.3
China
Outsourcing
Jun-21
3.8
China
Telecoms
Dec-21
Investor(s)
Deal
date
China Energy Investment, National
Social Security Fund - China, JD
China Mobile Limited
PIPE
MRO, China Structural Reform
Fund Co., Ltd., State Development
and Investment Corporation, etc.
LF Logistics Management
Limited
Hong Kong
Buyout
A.P. Møller - Mærsk Group
3.6
SAR China
Logistics &
distribution
Dec-21
Hongta Securities, Wuhan Industry
State Owned Holdings Co.,Ltd.,
BOE Technology
Group Co., Ltd.
Shanghai Caitong Asset
PIPE
Management, Shanghai Guotai
3.0
China
3.1
China
2.3
China
2.2
China
Electronics
Aug-21
Junan Securities Asset
Management, Sinatay Life
Insurance, etc.
Allianz Global Investors, Barclays
Maanshan Dingtai Rare
Earth & New Material
Bank, BOCOM Schroders Asset
PIPE
Co., Ltd
Management, Caisse de depot
et placement du Quebec, China
Logistics &
distribution
Nov-21
Pacific Life Insurance, etc.
Nanjing Iron &
Steel United
Buyout
Hebei Hua Tuo Pharmacy
Medicine Chain Co.,Ltd.
Jiangsu Shagang Group
LBX Pharmacy Chain Joint Stock
Add-on
Company
Materials
Oct-22
Healthcare
IT
Aug-21
Source: Preqin Pro. Data as of January 2023
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
14
But signs of decoupling are present. As of September 30, 2022, there were 262
Chinese companies listed on the NYSE, Nasdaq, and NYSE American, with a total
market capitalization of $775.6bn. These numbers reflect a drop of more than
half a trillion dollars since June due to the delisting of several major state-owned
enterprises.3
IPOs remained investors’ preferred way to exit. A majority, or 42 out of
58, exits were IPOs in 2022 (Fig. 17). More Chinese companies are listing in Hong
Kong or China’s A-share market, comprising the Shanghai Stock Exchange (SSE)
and Shenzhen Stock Exchange (SZSE), which accounted for 39% of global
IPO financing.4
All attention on China’s long-term policies
Fund managers and investors paid close attention to October’s 20th Party
Congress, a week-long conference where President Xi Jinping secured a historic
third term in China. The Congress report emphasized China’s key priorities and
set targets for 2035 and 2050. Nearer-term goals include reaching the per capita
GDP level of a moderately developed country, achieving technological self-reliance,
enhancing China’s soft power, and increasing the per capita disposable income of
residents by 2035.5
Many of these goals are a continuation of the 14th Five-Year Plan (2021
– 2025) announced in 2021. The Plan’s “dual circulation” development strategy
emphasizes the leading role of domestic consumption in the economy, supported
by international trade and investment.
https://www.uscc.gov/sites/default/files/2022-09/Chinese_Companies_Listed_on_US_Stock_
Exchanges.pdf
3
“ The PE community in China has
been embracing more diversified
exit methods, especially after
experiencing a trough in IPOs in
2022. In addition to the revival of
listings on US capital markets,
the eased listing requirements of
the Hong Kong Stock Exchange,
and the introduction of the
Shanghai Stock Exchange STAR
Market, other exit methods
such as strategic sales, buyoutbacked exits, secondaries, and
distribution in kind provide more
opportunities to GPs and LPs to
achieve better-realized, cash-oncash returns.
“
Yang Lei
Managing Director and Head
of Huatai International Private
Equity Fund
Huatai Securities
https://news.bloomberglaw.com/bloomberg-law-analysis/analysis-us-market-shivers-in-ipowinter-china-feels-fine
4
https://www.china-briefing.com/news/20th-party-congress-report-what-it-means-forbusiness/
5
Fig. 12: Most active buyers by number of buyout deals,
2017 – 2023 YTD
Most active buyers
No. of deals
Shanghai Caitong Asset Management
65
BPEA EQT
61
Lord Abbett China Asset Management Co.,ltd.
58
CITIC Capital
48
Hillhouse Capital Management
44
CITIC Securities
38
PAG
37
CLSA Capital Partners
32
Tencent Investment
30
China Asset Management
29
Source: Preqin Pro. Data as of January 2023
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
$1.3bn
15
Fig. 13: Annual number and value of secondary buyout deals in
Greater China, 2017 – 2022
16
6
14
5
No. of deals
12
4
10
8
3
6
2
4
1
2
0
Aggregate deal value ($bn)
Total amount of secondary buyout
deals in 2021
0
2017
2018
2019
No. of deals
2020
2021
2022
Aggregate deal value ($bn)
Source: Preqin Pro
Fig. 14: Annual number of PE-backed secondary buyout deals by
industry/sector in Greater China, 2017 – 2022
No. of deals
20
15
10
5
0
2017
2018
2019
Business services
Energy & utilities
Healthcare
Information technology
Real estate
2020
2021
2022
Consumer discretionary
Financial & insurance services
Industrials
Raw materials & natural resources
Telecoms & media
Source: Preqin Pro
Aggregate deal value
($bn)
Fig. 15: Annual aggregate secondary buyout deal value by industry/
sector in Greater China, 2017 – 2022
6
5
4
3
2
1
0
2017
2018
Business services
Energy & utilities
Healthcare
Information technology
Real estate
2019
2020
2021
2022
Consumer discretionary
Financial & insurance services
Industrials
Raw materials & natural resources
Telecoms & media
Source: Preqin Pro
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
16
The 20th Party Congress goal of reducing reliance on foreign resources and
technology continues to support this strategy.
These plans were carefully watched in the wake of regulatory shocks in 2021,
when China banned the private tutoring industry and set stricter financial rules for
property development in a bid to cool the property market.
Another key focus of China’s government is the clean energy transition.
President Xi announced in September 2020 that the country will lower its
carbon emissions by 2030 and achieve carbon neutrality by 2060. The president
also made a statement at the general debate of the 76th session of the United
Nations General Assembly in 2021 that China would stop backing new foreign
coal projects in other developing countries.6 However, the 20th Party Congress
maintained a realistic outlook and emphasized the need to ensure energy stability
by establishing renewable energy sources first, and reducing reliance on coal and
fossil fuels later.
6
https://news.un.org/en/story/2021/09/1100642
Fig. 16: Top 10 PE-backed secondary buyout deals announced and completed in 2021 – 2023 YTD
Portfolio
company
Investor(s)
Deal size
($mn)
Deal
status
Location
Industry
Deal
date
HCP Packaging
(Shanghai) Co. Ltd.
Carlyle Group
1,000.0
Completed
China
Packaging
May-22
CJ Rokin Logistics
Supply Chain Co., Ltd
FountainVest
Partners
650.5
Completed
China
Industrials
Feb-21
Jiangxi Zhenshiming
Pharmaceutical Co., Ltd.
Warburg Pincus, Huagai Capital,
ZUIG Investment, Zhongsheng
Pharmaceutical,
Goldstone Capital
260.0
Completed
China
Pharmaceuticals
Dec-21
Tarena International, Inc.
Ascendent Capital
Partners
230.6
Completed
China
Consumer
discretionary
Apr-21
CAR Inc.
MBK Partners
228.4
Completed
China
Consumer
discretionary
Nov-20
China F&B Group
FountainVest
Partners
160.0
Completed
China
Consumer
discretionary
Nov-21
Trimco International
Holdings Limited
Brookfield
Property
Group
–
Completed
Hong
Kong SAR
- China
Consumer
products
Nov-22
Guardian Shanghai
Hygiene Service Ltd.
EQT
–
Completed
China
Business support
services
Mar-22
Kenake (Shanghai)
Catering Management
Co., Ltd
FountainVest
Partners
–
Completed
China
Travel & leisure
Dec-21
Shanxi Guangsheng
Medicinal Package Co.,
Ltd.
Advent International
–
Completed
China
Pharmaceuticals
Dec-21
Source: Preqin Pro
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
Fig. 17: Annual number of exits by type, 2017 – 2022
70
60
No. of deals
remain investors' preferred way to
exit, with 42 out of 58 exits being
IPOs in 2022
With the reopening of China well underway, the market outlook for 2023
appears positive. Chinese consumers will resume spending, boosting consumer
discretionary, retail, and travel sectors. Fundraising and dealmaking conditions may
also improve for China’s PEVC industries.
50
40
30
20
10
0
2017
2018
IPO
2019
Trade sale
2020
Sale to GP
2021
2022
Restructuring
Source: Preqin Pro
Fig. 18: Greater China-based PEVC: rolling, 1, 3, and 5-year horizon
IRRs
14%
12%
Annualized return (%)
IPOs
17
10%
8%
6%
4%
2%
0%
-2%
-4%
1 year to Jun-22
3 years to Jun-22
5 years to Jun-22
Source: Preqin Pro
Preqin Territory Guide Private Equity and Venture Capital in Greater China 2023
18
Net IRR since inception
Fig. 19: Greater China-based PEVC: median net IRRs and quartile
boundaries by vintage year, 2010 – 2019
50%
40%
30%
20%
10%
0%
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Vintage year
Top-quartile net IRR boundary
Median net IRR
Bottom-quartile net IRR boundary
Source: Preqin Pro
Fig. 20: Greater China-based top-performing funds (vintages 2009 – 2019)
Firm
Vintage
Fund size
(mn)
Strategy
Net IRR
(%)
Date reported
Harvest Capital
2010
5.4 USD
Growth
100.0
30-Jun-22
Zhejiang TTGG Yuan DE Fund
TTGG Asset Management
2018
133 RMB
Growth
84.6
31-Dec-22
Hefei Zhong’an Zhaokun
Fund
China Merchants Capital
2016
1,101 RMB
Growth
84.0
31-Dec-22
BA Capital
2019
1,000 RMB
Venture
(general)
81.0
30-Jun-22
Harvest Capital
2010
14.7 USD
Growth
78.0
30-Jun-22
K2VC
2010
14 USD
Early stage
77.0
30-Jun-22
Blue Lake Capital
2019
212 USD
Venture
(general)
74.0
30-Jun-22
TTGG Asset Management
2018
3 RMB
Growth
70.8
31-Dec-22
Borchid Capital
2018
410 RMB
Venture
(general)
67.0
30-Jun-22
Loyal Valley Capital
2018
390 USD
Growth
60.0
30-Jun-22
Fund
WIT Alliance Technology
Limited
BA Capital RMB Fund II
Great Happy Group Holdings
Limited
K2 Partners Fund I
Blue Lake Capital Fund III
TTGG Micro Alliance Special
Fund
Suzhou Fengqiao Jichu
Venture Fund
Loyal Valley Capital
Advantage Fund I
Source: Preqin Pro
Private Equity and Venture Capital in Greater China 2023: Preqin Territory Guide
19
Fig. 21: Most consistent top-performing Greater China-based PEVC fund managers
Headquarters
Overall no. of
funds with
quartile ranking
No. of funds in
top quartile
No. of funds in
second quartile
Average
quartile rank
CAS Investment Management
China
5
3
2
1.40
Eminence Ventures
China
4
2
2
1.50
Harvest Capital
China
27
15
10
1.56
Hong Kong SAR - China
3
2
0
1.67
Blue Lake Capital
China
4
2
1
1.75
WestSummit Capital
Management
China
4
2
1
1.75
Eastern Bell Capital
China
5
3
1
1.80
V-Capital
China
5
3
0
1.80
HighLight Capital
China
6
3
1
1.83
K2VC
China
5
2
1
2.00
Hong Kong SAR - China
4
2
0
2.00
China
3
1
1
2.00
Firm
Capital Today
NewQuest Capital Partners
Hillhouse Capital Management
Source: Preqin Pro
All rights reserved. The entire contents of Private Equity and Venture Capital in Greater China 2023: Preqin Territory Guide are
the Copyright of Preqin Ltd. No part of this publication or any information contained in it may be copied, transmitted by any
electronic means, or stored in any electronic or other data storage medium, or printed or published in any document, report, or
publication, unless expressly agreed with Preqin Ltd. The information presented in Private Equity and Venture Capital in Greater
China 2023: Preqin Territory Guide is for information purposes only and does not constitute and should not be construed as a
solicitation or other offer, or recommendation to acquire or dispose of any investment or to engage in any other transaction,
or as advice of any nature whatsoever. If the reader seeks advice rather than information then it should seek an independent
financial adviser and hereby agrees that it will not hold Preqin Ltd. responsible in law or equity for any decisions of whatever
nature the reader makes or refrains from making following its use of Private Equity and Venture Capital in Greater China 2023:
Preqin Territory Guide. While reasonable efforts have been made to obtain information from sources that are believed to be
accurate, and to confirm the accuracy of such information wherever possible, Preqin Ltd. does not make any representation or
warranty that the information or opinions contained in Private Equity and Venture Capital in Greater China 2023: Preqin Territory
Guide are accurate, reliable, up to date, or complete. Although every reasonable effort has been made to ensure the accuracy
of this publication, Preqin Ltd. does not accept any responsibility for any errors or omissions within Private Equity and Venture
Capital in Greater China 2023: Preqin Territory Guide or for any expense or other loss alleged to have arisen in any way with a
reader’s use of this publication.