China's VC, PE funds key to new tech

Zero2IPO chief says firms have more than $1.02 trillion under management

Chinese venture capital and private equity firms have assets totaling more than 7 trillion yuan ($1.02 trillion) under management this year, and the amount will exceed 10 trillion yuan in 2020, according to the chief of Zero2IPO Group.

There are been more than 10,000 venture capital and private equity firms in China with assets totaling more than 7 trillion yuan, said Ni Zhengdong, chairman of leading venture capital and private equity research company Zero2IPO.

"Although some people say that China's VC and PE market is facing a challenge of capital shortage, data shows this is not true," said Ni.

According to Zero2IPO, there were 2,191 new funds financing 1.2 trillion yuan in the first 11 months, and yuan-dominated funds have become the main force, with their number totaling 2,092 and funds financing 985.3 billion yuan.

"I believe Chinese venture capital and private equity institutions will manage more than 10 trillion yuan in 2020. Innovation, entrepreneurship and equity investment will play an important role in China's new economy," said Ni.

Ying Wenlu, chairman of Nanjing-based Addor Capital, said China's VC and PE market is not short of money, but this is being attracted to excellent VC and PE institutions.

"In the United States, 10 percent of VC and PE institutions manage about 90 percent of the funds in the market, and I believe China will have this trend," said Ying, adding that his firm financed 12.2 billion yuan this year.

There were 7,859 venture capital and private equity investments made in the first 11 months with a total investment of 668.3 billion yuan. In the full year of 2015 was about 500 billion yuan, according to Zero2IPO.

"The funds were mainly invested in companies at the early development stage or very mature stage before initial public offering, and those at the middle development stage faced difficulties in setting financing," said Ni.

There were 1,554 exits from January to November, compared to 606 in 2011. A total of 231 exit deals were made by initial public offering and 62 percent of the listed companies were backed by VC and PE funds.

"Shenzhen Stock Exchange and the Nasdaq Stock Market have brought investors good investment returns this year," said Ni.

caixiao@chinadaily.com.cn