20081110-投中研究院-China_s_Private_Equity_Market_23页_380kb

China’s Private Equity Market Report Q3 2008 Summary

PE Investments Overview

• Total PE investments in Q3 2008: US$2.117 billion, decreasing by 17.1% in investment amount and 42.4% in deal count quarter-on-quarter. Average deal size reached US$111 million, up 43.9% QoQ.
• Deal size distribution:
  • US$10-30M: 7 deals
  • US$50-70M: 4 deals
  • US$100M+: 4 deals (incl. 2 PIPE deals by Warburg Pincus)
• Top contributors:
  • Warburg Pincus: Most PIPE deals (2), led by investments in a pharmaceutical company.
  • Morgan Stanley: Largest investment amount (US$77M).

Sector Analysis

• Industrial Distribution:
  • Real Estate: 2 deals, US$793M (highest investment sector, 37.4% of total), avg. deal size US$396M.
  • Manufacturing: 4 deals, avg. deal size US$112M.
  • IT Services: 4 deals, US$354M, including a joint venture for IT services.
  • Others: Healthcare, Energy & Mining, Media & Entertainment, etc.
• Hotspot Sectors:
  • Real Estate surged due to economic downturn, with rising deal size.
  • Manufacturing and IT Services remained strong, but real estate became the dominant sector in terms of investment.

Investment Strategy Analysis

• Growth Capital: Dominated, accounting for 80.4% of total deal value and 65.0% of deals (avg. $134M per deal).
• PIPE: 4 deals, US$108M, led by Warburg Pincus (avg. $27M per deal).
• Buyout: Only 2 deals, US$263M, declined significantly in value.

Geographical Distribution

• Top Regions: Beijing (US$399M), Shanghai (US$1,173M), Guangdong (US$770M).
• Overall: Investment concentrated in major economic hubs, with a mix of regional distribution.

Investor Type Analysis

• Foreign vs. Domestic: Foreign PE firms led, with 17 deals (US$1.97B) vs. domestic firms (2 deals, US$146M).
• Trend: Domestic firms faced pressure due to stock market volatility.

Key Trends

• Real Estate as a Hotspot: High investments driven by long-term optimism despite global challenges.
• Sector Focus: Manufacturing, IT Services, and Real Estate were top sectors.
• Economic Impact: Overall market cautious due to global financial crisis, but real estate maintained high activity.

Conclusion

Q3 2008 saw a significant drop in PE investments, with stability maintained by Real Estate and Growth Capital strategies. Domestic deal volume increased but value saw a steep decline.