Performance of China-Focused Private Equity Funds – A Comparison to the Wider Industry

by Gary Broughton

  • 14 Oct 2011
  • PE

Private equity fund managers are increasingly looking to China for fund investments, with its booming economy and large resources, China has become an attractive prospect for potentially high returns across many largely untapped industry sectors. How does the performance of private equity funds with a significant exposure to China compare to the industry as a whole? Does China represent the attractive investment environment that it is often believed to be?

By analyzing the performance of 32 private equity funds that have a substantial interest in China and conduct a comparison of their performance against the rest of the industry against Preqin’s global benchmarks, we can examine the fund level quartiles of each of the 32 funds within the sample. This provides us with the fairest insight into their performance against the industry as a whole.

Of funds with substantial investment in China, 72% are currently above the median benchmark with 53% currently ranked in the top quartile, showing that for many investors and fund manager alike, China has the potential for very positive private equity returns.

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