2018-中国创投暨私募股权投资市场2011前11月市场数据--英文版_56页_1mb

China VC/PE Market Review Jan-Nov 2011

Overview of China's VC/PE Market

The Chinese VC/PE market experienced significant growth in 2011, marked by a surge in fundraising, investment, and exits. The market was influenced by favorable policies and the increasing participation of both domestic and foreign limited partners (LPs). This period saw a notable rise in the number of funds and investment deals, with a concentration of activity in specific industries and regions.

Major Findings in the VC Market (Jan-Nov 2011)

• Fundraising: A total of 323 funds were raised by foreign and domestic institutions, a 118.2% increase year-on-year, reaching an all-time high. The total capital raised amounted to US$26.46B, a 162.0% increase from the previous year.
• RMB Funds: RMB funds saw the highest fundraising boom, with 295 funds raising US$19.80B, representing a 115.3% increase in the number of funds and a 219.6% increase in fundraising amount.
• Foreign Currency Funds: 28 foreign currency funds were raised, totaling US$6.66B, an increase of 154.5% in number and 70.7% in amount from the previous year.
• Reason for Growth: The rapid development of domestic LPs and favorable policies for foreign RMB funds drove the growth in fundraising. Foreign institutions began to establish RMB funds to seek better returns in the Chinese market.

Major Findings in the PE Market (Jan-Nov 2011)

• Fundraising: 204 new PE funds were raised, up 175.7% year-on-year, hitting a new high. The total capital raised reached US$33.58B, a 27.2% increase from the previous year.
• RMB Funds: 180 RMB funds raised US$20.23B, with a 181.3% increase in the number of funds and a 103.0% increase in fundraising amount. The average fundraising amount for RMB funds was US$118.31M, slightly lower than the previous year's US$155.71M.
• Foreign Currency Funds: 24 foreign currency funds raised US$13.35B, showing a faster fundraising pace than the previous year.
• Investments: PE funds launched 654 investments, a 113.0% increase year-on-year. The total investment amount reached US$23.81B, a 155.6% increase from the previous year.
• Trends: Growth funds dominated, while real estate funds saw rapid growth. The domestic securities market's poor performance and primary market competition led to increased interest in low-valuation listed companies, with more PE institutions engaging in private placements and PIPE transactions.

Major Findings in the M&A Market (Jan-Nov 2011)

• Number of Deals: The number of M&A deals exceeded the full year of 2010, with 1,040 deals recorded. This includes 175 VC/PE-backed M&A deals.
• Industry Focus: Energy and mineral, real estate, and machinery manufacturing sectors led in the number of M&A deals, while clean-tech, bio/healthcare, and finance sectors had higher total values.
• Geographic Concentration: Beijing remained the top region for M&A activity, while Jiangsu attracted the most investment in terms of value.
• VC/PE-backed M&A: These deals accounted for a significant portion of the market, with a total value of US$9,922.41M. The Internet and clean-tech sectors attracted more attention.

Major Findings in the IPO Market (Jan-Nov 2011)

• IPO Activity: 548 Chinese enterprises listed worldwide, with Chinese IPOs accounting for 59% of the total. ChiNext was the primary listing venue for domestic IPOs.
• Domestic IPOs: 263 domestic IPOs were listed, with a total financing amount of US$41.08B. Machinery manufacturing and chemical raw materials & processing were the top sectors.
• Overseas IPOs: 61 overseas IPOs were listed, with a total financing amount of US$12.76B. Finance and bio/healthcare sectors were the most prominent.
• ROI Differences: The average ROI for domestic IPOs was 8.43X, while for overseas IPOs it was 6.64X, with notable variations across different exchanges. The average ROI of six VC/PE firms behind SINOVEL reached 480X, indicating high performance for some.

Market Change Analysis & Z-Insights

Policies and Regulations

• VC/PE Fundraising Policies: The Ministry of Finance and the National Development and Reform Commission introduced measures to support emerging industries through VC investments. The CSRC included direct investment in routine regulation, allowing securities companies to establish direct investment funds and private equity funds.
• M&A Security Reviews: The Ministry of Commerce introduced the security review system for foreign M&A in key industries and regulations for cross-border RMB direct investment, which facilitated foreign capital inflows.
• ChiNext Advisory Committee: The CSRC established the Expert Advisory Committee of ChiNext to assist in the IPO review process, improving efficiency and transparency.

LP Market Development

• LP Participation: In Jan-Nov 2011, 4,758 LPs were recorded, with a total capital available for investments of US$679.28B.
• Domestic vs. Foreign LPs: Domestic LPs accounted for 80% of the total, while foreign LPs accounted for 20%, despite having five times the capital available compared to domestic ones.
• Main LP Types: Domestic LPs included government agencies, public pension funds, large/medium enterprises, wealthy families, and financial institutions. Foreign LPs included public pension funds, insurers, universities, FOFs, family offices, and large/medium financial institutions.

Key Trends

• RMB Funds: Dominated fundraising and investment activity, driven by domestic LP growth and policy support.
• Internet and Clean-tech: Attracted significant VC/PE investment, although their IPO activity was relatively low.
• IPO Performance: Domestic IPOs showed higher ROI than overseas ones, with ChiNext being the most active market for domestic listings.
• Market Volatility: The debt crisis in Europe and the U.S., along with turmoil in China concept stocks and VIE issues, impacted overseas IPO activity.

Conclusion

The Chinese VC/PE market in 2011 saw unprecedented growth in fundraising and investment, driven by supportive policies and the increasing involvement of both domestic and foreign LPs. While RMB funds led in fundraising, foreign currency funds also showed strong performance. The M&A market was active, with a focus on energy, real estate, and machinery manufacturing. The IPO market, particularly domestic, remained robust, with ChiNext as the main listing venue, though overseas IPOs faced challenges due to global economic conditions. Overall, the market demonstrated a dynamic and evolving landscape with significant implications for future investment strategies.