Equity market seen growing, despite a complicated 2018

China’s private equity market is likely to keep growing this year despite a complicated performance in 2018, according to a report by Bain & Company released on Wednesday.

“Investors have been cautiously optimistic about the private equity market in China for the past year, and they may continue to keep that attitude this year despite many complications in the market,” said Kelly Pu, a partner with the consultancy firm and co-author of the Bain & Company China Private Equity Report 2019.

Last year, the deal value of China’s private equity market rose to a record US$94 billion, leading the growth in the Asia Pacific region. However, the number of deals declined 13 percent, indicating less dynamism in the market.

The high deal value was partly a result of investors making large-scale sell-offs after major gains in initial public offerings and trade sales.

But stringent regulation on wealth management products led to an 85-percent drop in fundraising of the yuan, according to the report.

“While the past year has been a time of change within the private equity market in China, we expect to see continued growth moving forward,” said Zhou Hao, also a partner at Bain & Company.

“Moreover, we have seen that the changes in the market have brought about very positive changes on the company side, as they have eased into how business is evolving,” Zhou said.

Consumption, health care, and technology will likely be the focus of investment for private equity this year, the report said.