Money rules

China never lacks opportunities for private equity investors, but fund managers must now keep up with a swiftly maturing regulatory framework, writes Joy Jiao

Private equity and venture capital (PE/VC) funds in China have defied global downward trends of late and best predictions are for continued sterling performances for the rest of the year. But with the rapid growth comes also, in many areas, a rapid rate of regulatory development to keep pace and better control fresh markets.

Although the proceeds raised and the amounts invested by PE/VC funds declined globally in 2016, the China market made a strong showing with new highs, as PE/VC-led M&A deal value increased to US$223 billion, according to China Private Equity/Venture Capital 2016 Review and 2017 Outlook, published by PricewaterhouseCoopers (PwC).

Looking ahead to 2017, PwC predicts that the proceeds raised by Chinese PE/VC funds will continue their upward trajectory. M&A led by PE/VC, particularly overseas M&A, will become even more frequent, and PE/VC investment will be active in such industries as high technology, financial technology, culture and entertainment, healthcare, real estate and consumer goods, the multinational accounting firm says. However, funds will continue to face exit challenges this year.