Private Equity in China Set to Grow? But, Define "Private"

Filed in archive Private Equity on March 15, 2008

The establishment of four new private equity funds is being worked out by the Chinese government, according to the Caijing Magazine. The decision by China's State Council would bring the total number of China's home grown private equity firms to 10.

The new funds have already been approved, according to XFN-Asia. They include:

• The Huayu Water Industry Investment Fund, which will target water services for inland cities


• The Tianjin Ship Industry Investment Fund


• The Northeast Equipment Manufacturing Industry Investment Fund


• The Urban Infrastructure Construction Investment Fund

China entered the world of private equity 16 months ago when it approved it's first PE fund, Bohai Industrial Investment Fund, in December of 2006. It was almost a year before the Bohai Fund made it's first investment. The goal, then and now, seems to be to draw private investors into projects targeted for development , while maintaining a degree of government oversight on how the private funds get invested.




Of course, that begs the question of exactly what "private" means in China's new PE world. The concept is still developing, I think.

Maybe over the next week or two I'll take a closer look at how the six funds that already exist are doing...