The launch of the China Venture Capital Association (CVCA) has been announced in Beijing, signaling the creation of an association of firms which collectively manage in excess of $25bn of private equity and venture capital targeted for investment in China and Asia.
Leading investment managers such as Carlyle, Goldman Sachs and Warburg Pincus will be founding partners of the association, which will be chaired by Warburg Pincus managing director Chang Sun and counts the support of the National Venture Capital Association and Digital Fortune magazine in Beijing. The CVCA represents the first national body for venture capital in the Greater China region, following in the steps of local associations in Hong Kong and Shanghai.
Warburg Pincus Asia’s David Li said the rationale of the CVCA was to create a body that will represent the interests of investors in what is still a relatively new market. “Investors in Greater China have previously been hampered by restrictions on ownership and a lack of viable exit opportunities.”
The CVCA will be incorporated in Hong Kong with offices in Beijing and will comprise 50 firms as founding members. It aims to provide venture capital firms with research data whilst promoting and maintaining ‘high ethical and professional standards among members’.
Jean Salata, managing partner at Baring Private Equity Partners Asia, one of the founding partners of the CVCA, said he was very positive about the association’s prospects. “Any body that raises the profile and issues that matter is very good news, although it is too early to tell what sort of impact the CVCA will have.”
In 2001, venture capital investment accounted for around $500m of the $40bn of total investment in the Greater China region.