Yichen Zhang, founder and chief executive buyout firm CITIC Capital talks to Private Equity International about the trends and challenges in China private equity, as the industry sees a shift towards control-buyout opportunities
“In terms of the trends in China in private equity, one trend is the shift to buyouts. As the economy matures and focuses overall on efficiency improvement rather than growth, buyouts will become more dominant – that’s the first trend.
The second trend is in terms of sectors, the economy overall is shifting more from investment-driven to consumption-driven. And the next generation is more focused on better living, so consumption upgrade is a major theme.
In terms of challenges in China for private equity, I think one is for buyout type of deals there’s still generally a lack of a deep pool of operating talent. Second, for growth type of deals there are a lot of capital still chasing internet, new economy type of deals and for those type of deals the valuation can appear ‘bubble-ish’.”