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TMT continues to lead private equity and venture capital investment

Private equity and venture capital (PE/VC) markets eased again in the second half of 2018 after a rebound in the first half.

Private equity and venture capital (PE/VC) markets eased again in the second half of 2018 after a rebound in the first half, according to the MoneyTree Report released today by PwC. 

The report showed that 1,883 PE/VC deals were completed in Telecommunications, Media and Technology (TMT)  in the second half, the highest since 2016 and accounting for 46 percent of total PE/VC investment during the period.

In the fourth quarter, overall PE/VC investments fell, dipping below 600 in TMT sectors. The combined deal value in TMT declined in the third and fourth quarters after a record high in the second quarter last year. 

In the second half of 2018, there were 54 large-size deals with a single deal value over US$100 million, and these large-size deals had a total value of US$21.311 billion, making up 76 percent of the total in TMT sectors in the second half.

"Although TMT sectors saw a big drop in deal number and value compared with the first half amid the lacklustre PE/VC investment market, they remained the leaders among all sectors," said PwC China TMT Leader Gao Jianbin. 

He added: "Under the government strategy to leverage innovation to drive growth, high-quality innovative and emerging enterprises will inject new vitality into the TMT industry." 

Investment value in mature companies in the second half of 2018 soared, adding 1.5 times from the first half of 2018 and up 84 percent from the second half of 2017 to a combined US$6.5 billion. This was because investors were adopting a strategy to avoid risks by mainly investing in mature projects that had survived market competition and were in stable development. 

“Although the technology industry is rapidly expanding under favourable policies, Internet and mobile Internet are still the attractive sectors in the TMT industry and Internet finance, Internet-based education, entertainment and content sharing were hot sectors pursued by investors,” commented Alvin Bao, PwC China Transaction Service Partner. 


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