Venture Capital Fund Seeks Water Plays in China

Filed in archive News on September 6, 2011

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As China's government spends billions to reverse the damage to its water resources from pollution and provide clean water to its people, water-treatment firms in the country are proving to be attractive venture capital fund targets. Private equity and venture capital firms are pouring money into these companies in hopes of high returns from a heavily subsidized industry.

China's rapidly growing water sector is valued at $48 million, currently the third largest in the world behind the US and Japan. The industry is expected to reach $150 billion over the next five years, so it's a clear choice for many fund managers looking for safe places to allocate capital. Buyout firms like Sequoia Capital China and CDH Investments are among some of the major companies that took stakes in water-treatment firms over the past few months.