Academics lead the charge for Chinese private equity

Tsinghua University’s opening of its private equity research institute in partnership with Kirkland & Ellis should open the door further for private equity to enter the region.

Tsinghua University in Beijing is developing a private equity research institute in partnership with international law firm Kirkland & Ellis.

The Private Equity Institute will be linked to top Chinese business school Tsinghua School of Economics and Management and the China Center for Financial Research of Tsinghua University. 

This is the first such institution in China. Doing deals in the nominally Communist nation has been difficult for buyout firms, but interest is high.

David Eich, Kirkland’s head of private equity in Asia, said:  “Private equity activity relating to China, especially capital formation, is on fire. But there remain cold spots, including unique regulatory challenges and gaps in critical professional subcultures.”

As the country attempts to put in place a legal framework for the industry, an opportunity for the institute will be to develop economically and socially sound regulation for the enormous private equity market, he added.

The attempt to secure a hold on the country’s companies continues apace. Citic Capital Partners recently raised a $425 million (€313 million) fund, while Baring Asia spent $100 million on two companies in the country’s steel sector.