In January, private equity and venture capital firms in China completed 89 exits totaling roughly $2.9 billion, according to a report from Zero2IPO.
The value represents a 256 percent increase from January 2013 and a 50 percent increase from the previous month.
The majority of exits (83) were through IPO. Five were through trade sale and one was a secondary sale.
The IPOs had an average return on book value multiple of 15.69x, according to the data.
By comparison, for the full year 2013, there were 126 exits in China, marking three consecutive years of decline, according to separate data from PricewaterhouseCoopers.
The decrease in exits, which stems from the 15-month closure of the domestic IPO markets, is expected to reverse this year and result in a spate of divestments, industry sources said.
“Funds [in China] are aware they need to generate exits for their LPs, particularly if they want to fundraise,” says Bonnie Lo, partner and co-head of China Business at NewQuest. “A lot of funds now will internally drive exits to fundraise just to stay in game.”
On the investment side, Zero2IPO data shows that in January, 71 private equity and venture investments were completed. Of those, 58 had disclosed the value, which totaled $2.9 billion. About one-third of the total came from the $890 million privatisation of AsiaInfo Group led by CITIC Capital Partners, which completed in January.
The figures for overall M&A were up 162 percent year-on-year in January, rising to $7.56 billion across 109 completed transactions (97 of which disclosed the deal value).
Private equity and venture capital-backed M&A accounted for 55 of the deals.