The emergence of a vibrant PE industry in China demonstrates that there is an alternative channel of new investments for financing Asia's transformation from an old industrial base to a new green economy model.
Chinese private equity (PE) funds have emerged as an important force in the country's industrial transformation. There are now an estimated 6,000 PE funds registered in China, managing RMB 2 trillion (US$325 billion) of funds, representing 15 per cent of the US$2 trillion of assets under management (AUM) by PE firms globally. In contrast to earlier years when funding was mostly raised in US dollars, the bulk of new PE funds raised in the last three years has been RMB-based. In 2012, 344 PE funds raised a total of US$18.1 billion in new funds denominated in RMB, whereas 15 foreign-currency PE funds raised US$7.2 billion.
The emergence of a vibrant PE industry in China demonstrates that there is an alternative channel of new investments for financing Asia's transformation from an old industrial base to a new green economy model of higher energy efficiency, lower pollution and more knowledge-based service structure.
A robust PE industry in Asia will require putting into place the building blocks that will make them competitive on a global scale:
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