China-focused Fundraising 2005-2010 YTD

by Anna Strumillo

  • 12 Apr 2010
  • PE

Preqin data demonstrates that there are 55 China-focused private equity vehicles currently on the road, targeting an aggregate USD 22.8 billion in capital commitments. The biggest fund currently in market is GP Capital targeting up to RMB 20 billion (approximately USD 2.9 billion). The fund focuses on investments in the financial sector of China. The fund manager, GP Capital, is a 50/50 joint venture between Shanghai International Group Co. and China International Capital Corp. (CICC).

The second largest fund in terms of capital being targeted is CDH China Fund IV. The vehicle is seeking USD 1.4 billion in commitments and focuses on investing in industry leaders that benefit from China's large economy, long-term growth and increasing consumer purchasing power.

In terms of historical fundraising for vehicles targeting investment in China, Preqin data shows that the number of such funds achieving a final close in 2005 and 2006 was almost equal, with 21 and 22 vehicles closing in the respective years.  The aggregate capital raised by this type of funds in 2005 stood at USD 3.3 billion and doubled in 2006 when China-focused funds raised USD 7.7 billion. 2007 witnessed a significant increase in number of private equity funds focused on this region. The number of China-focused funds that reached a final close that year more than doubled and 46 vehicles attracted USD 11.6 billion in capital commitments.

The following year the aggregate capital raised by Chinese vehicles increased considerably and stood at USD 16.1 billion even though the number of closed vehicles dropped to 42.  However, the recent financial crisis had a significant impact on fundraising for all private equity vehicles, including those targeting China. The number of such vehicles reaching a final close halved in comparison to 2008 and the aggregate capital raised stood at merely 25% of the capital secured by funds closed the preceding year. As of April 2010, there are five China-focused funds to have closed so far this year attracting an aggregate 3.3 billion.

To find out more about Preqin's research into funds in market, see Funds in Market

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