The amount raised by China-focused US dollar funds continued a multi-year slide in 2013, with the total reaching only $2.15 billion – about 75 percent less than the 2012 total of $8.35 billion, according to Private Equity International's Research & Analytics division.
In 2011, the total amount of US dollar funds raised was $15.9 billion.
Volume was down dramatically as well, with only 7 funds closing in 2013 compared to 18 the previous year.
RMB funds fared no better, dropping by more than 60 percent to 11.3 billion RMB (€1.37 billion; $1.9 billion) for the year compared to 38.3 billion RMB in 2012.
China’s weak numbers contrast with global private equity fundraising, which totaled $356 billion, the largest amount since the beginning of the global financial crisis in 2008, PEI reported earlier.
In China, exits and liquidity have been problematic, and returns have weakened. Domestic IPOs have been frozen since late 2012 (though now new listings are apparently being re-started) as regulators reformed the listing process. Because most deals in Asia involve minority stakes, divestments through trade sales are difficult, leaving fund managers holding assets as they search for ways to divest, or just wait.
“Emerging market returns relative to the developed markets have not been as strong over the last few years, particularly for China,” Mark Machin, president of the Canada Pension Plan Investment Board in Asia, told PEI in an earlier interview.