Report: Chinese PE firms on the rise

A ranking of private equity firms active in China shows seven of the top ten firms to be domestic – a sharp change from 2007, when only one of the top ten was a domestic firm.

Domestic private equity firms in China have steadily gained ground, and in 2012 claimed the top five positions for the first time, according to a Zero2IPO report.

The top-ranked firm for 2012 – based on a variety of criteria including assets under management, investments closed, exits and fundraising – was Jiuding Capital, a Beijing-based firm started just five years ago. Jiuding also held the top position last year.

CITIC Private Equity Management was ranked second, followed by Fosun Capital, Goldstone Investment and Hony Captial.

Domestic Chinese firms claimed seven of the top ten spaces, just as they did in 2011, according to the report. 

This is a sharp turnaround from 2007, when Zero2IPO first began this ranking. In that year, only one domestic firm could claim a spot in the top ten.

The change reflects how much domestic firms have learned from foreign firms, according to Ada Ling, analyst at Zero2IPO. Ten years ago, all investment in China had to be brought in from foreign investors – businesses and local investors still needed their expertise.

“Foreign private equity served to lead the way,” Ling said. Over time, however, local firms began to learn from the foreign investors, as well as adopt their methods and standards.

Ling added that the 2012 rankings also show that the competition between firms is becoming more intense. The research firm first began the ranking with only 30 spots for private equity and in 2012 increased the number of spots to 50.

According to the report, 28 of the 50 firms were domestic private equity firms.