China's PE market bubbling and remains largest market in Asia Pacific

The market posted its second best results on record in 2017, and PE investors still favored Internet and technology sectors.

China's private equity market achieved its second best results on record and continued to be the largest market in Asia Pacific, a private report said today.

The deal value in the PE market grew to US$73 billion last year from US$63 billion in 2016, and the average investment size remained high at US$128 million, according to Bain & Company’s 2018 China Private Equity Report.

"The China private equity market has once again done exceptionally well and continues to show investors that it is maturing and becoming much more rational," said Lucia Li, partner with Bain & Company’s Private Equity practice in China. 

"Our findings have shown that the country remains increasingly desirable and competitive, so all the players wishing to succeed in the country need to ensure that they have developed both short-term strategies and long-term plans to win," Li said.

The Internet and technology sectors were still favored by PE investors in 2017, according to the report. 

However, the number of exits in China rose sharply to a record 393 last year, from 237 in 2016, and the value of the withdrawals remained flat from a year ago.

The report also highlighted that corporate merger and acquisition activities have fallen significantly amid the Chinese government's stricter capital control and policy.

"Companies need to invest and focus on areas such as cost transformation and management going forward as macro conditions become less sanguine," said Kiki Yang, partner with Bain & Company’s Private Equity practice and co-leader of APAC practice.

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