China drew a record US$16 billion (HK$124 billion) of investment from private equities last year, with retail, industrial goods and hi-tech the most sought-after sectors for investors, says a new report.
The report, jointly released by Bain & Company and the European Union Chamber of Commerce yesterday, said the country had become a top destination for private equity investors amid the ongoing global economic turbulence.
Private equity investment in China, which slumped in 2009 following the financial crisis, rebounded more than 60 per cent year on year to US$13.9 billion in 2010, and grew 15 per cent to US$16.1 billion last year. The figures do not include deals valued less than US$10 million. 'We expect PE capital growth to be stable and healthy in China this year,' said Han Weiwen, partner at Bain & Company.
Last year, funds raised by domestic private equities exceeded that by foreign investments for the first time, accounting for around 60 per cent of the total in China.
Han said there had been a change in the mix of private equity investment in recent years as investors increasingly shift funds from financial services to retail, hi-tech, industrial goods and health care.
The report gleaned information from 131 companies that received private equity investment between 2004 and 2008. It shows that 65 per cent of private equity capital went to companies in inland provinces such as Qinghai, Xinjiang and Sichuan instead of more developed coastal regions.