Preqin Territory Guide: Greater China 2022
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Preqin Territory Guide: Greater China 2022
Preqin Territory Guide: Greater China 2022
Contents
3 Driving into the future with new energy vehicles – Christine Fu, CS Capital
5 Key developments in China’s economy
10 Navigating uncertainty in China’s PEVC markets
16 League tables
Acknowledgements
Preqin contributors: Preqin data support: External contributors:
Cat Hall Moses Chan Christine Fu, CS Capital
Ee Fai Kam April Huang
Valerie Kor Reuben Lai
Jasmin Naim Samantha Lai
Harsha Narayan Vincent Li
Milly Rochow
Deisy Rojas
Tim Short
All rights reserved. The entire contents of Preqin Territory Guide: Greater China 2022 are the Copyright of Preqin Ltd. No part of this publication or any information contained in it may be
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or other offer, or recommendation to acquire or dispose of any investment or to engage in any other transaction, or as advice of any nature whatsoever. If the reader seeks advice rather than
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© Preqin Ltd. www.preqin.com 2
Preqin Territory Guide: Greater China 2022 Sponsored by
Driving into the future with
new energy vehicles
China is taking the lead in the production of new energy vehicles, an
industry that offers high growth potential for investors
The trend in the global automotive industry is shifting
towards electrification in the hope of realizing a low-
carbon, energy-efficient future. In China, new energy Christine Fu
vehicles (NEVs), including battery electric, plug-in Managing Director,
hybrid, and hydrogen fuel cell vehicles, are a crucial Head of International
part of the country’s ambition of becoming carbon Business
neutral by 2060. In 2021, 3.5 million NEVs were sold
in China, the world leader for seven consecutive
years. Sales rose by 158% over the previous year,
CS Capital
achieving a 13% penetration rate for NEVs with
private buyers accounting for nearly 80% of sales.
We believe that the NEV sector in China offers one
of the most attractive investment tracks in the next and the construction of more efficient electric vehicle
decade. Investments in this sector have amounted charging and battery swapping networks to make
to more than $160bn between 2015 and 2020, with electric vehicles more accessible.
venture and growth capital playing a significant
role.1 Tech start-ups, digital titans, and new energy Chinese government incentives include reducing
companies in the battery sector are also actively taxes and extending subsidies for NEV purchases,
looking to move into this sector. Original equipment expediting the elimination of older polluting vehicles,
manufacturers (OEMs) and suppliers are increasing promoting electric car sales in rural areas, and
investment in new areas to gain a foothold in this developing the battery recycling system. Policy
sector. We forecast that China’s NEV sector will makers have also introduced a green car quota
continue to grow at 20% CAGR on the back of system to encourage automakers to make more
favorable policies, higher spending power, strong environmentally friendly vehicles after NEV subsidies
market demand, technological innovation, and a end in 2022, and to boost NEV sales for public use
world-class supply chain. such as buses and trucks.
Strong policy support Changing market supply and demand
In China’s blueprint for the development of NEVs, In an era of booming NEV sales, many foreign
the China Society of Automotive Engineers estimated global OEMs, including Ford and Hyundai, are losing
that NEVs may account for 20% of total new favor with Chinese consumers. Companies such
vehicle sales by 2025, and 50% by 2035.2 China’s as Volkswagen and GM may also find themselves
State Council advocates significant technological under pressure. China’s NEV market in 2021 was
improvements in China's electric vehicle components dominated by local brands, and Tesla was the only
1
https://free.pedata.cn/1440998437364338.html
2
https://enviliance.com/regions/east-asia/cn/report_1302
© Preqin Ltd. www.preqin.com 3
Preqin Territory Guide: Greater China 2022
foreign brand in the top 10 lists of both overall brand combustion engines and exhaust systems, are losing
and nameplate sales, ranking second with a 13.4% their importance.
market share.
China is the leading frontier for electric and other
The reason for global OEMs’ weak performance advanced technology vehicles. Chinese OEMs and
in China’s booming electric market is that their suppliers are well-positioned and have a first mover
NEVs lack the features that consumers expect. The advantage. For example, Chinese manufacturers are
attractiveness of today's electric vehicles is not emerging as leaders in the field of electro-mobility,
just derived from the power source. In the Chinese with battery maker CATL recording high growth,
market particularly, smart and network connectivity controlling 50% of the market share in the world’s
have become fundamental product features and battery manufacturing sector.
major components of NEVs. In our view, start-up
automakers in China perform notably better in Innovative start-ups will continue to shape the future
innovation when compared to other automakers, of mobility. More Chinese enterprises are entering
exceeding them in both the adoption of advanced the race with Silicon Valley tech companies. Though
technologies and the user experience. their revenues may remain low, their influence on
the supplier industry is growing by leaps and bounds.
Just as in the transition between smartphones For instance, in 2021, German supplier Continental
and traditional cellphones, the focus of Chinese AG signed an agreement with Chinese AI start-up
consumers is no longer just on durability, but on Horizon Robotics to establish a joint venture in
including online and offline applications, as well as a Shanghai to integrate Horizon Robotics’ AI-enabled
myriad of smart eco-experiences. By this standard, processors and algorithms into Continental’s smart
most foreign brands’ products are viewed as basic cameras and control units for advanced driver-
smart electric vehicles, still in the fuel car era in assistance systems and automated driving.
terms of product definition. Path dependence and
inertia in product positioning constrain their ability Based on our team's 20-plus years of experience in
to innovate. It's easy to see why they are not as China's auto industry, we believe that technological
competitive as new entrants such as Tesla and NIO. advances in the energy and information fields
are transforming the global auto industry and
Technological edge providing unprecedented opportunities. In the past
The transformation of the automotive industry will decade, CSC has invested more than RMB 15bn
not stop with the electrification of the powertrain. in over 30 companies in the NEV sector, covering
New digitalization possibilities will open up other OEM, batteries, motors, electric drivetrains, power
fields, such as automated driving, mobility services, electronics, materials, operating systems, and
vehicle connectivity, and big-data applications. In microchips, hydrogen fuel cells, and more. Rapid
moving from motorized vehicles to digital mobility innovation and robust domestic demand are creating
products, the future of NEVs will be emission and strong momentum that investors and fund managers
accident-free, electrical, autonomous, and fully can leverage to capitalize on the opportunities in
networked. As we edge closer to such a future, this sector.
manufacturers of traditional components, such as
CS Capital ("CSC") is one of the largest private equity investment firms headquartered in Beijing with
over RMB 100bn of AUM from a diversified investor base. Riding on the need for advances in technology,
tech-enabled services, smart devices, and next-generation communication networks in China’s NEV and
healthcare industries, CSC invests in companies with attractive prospects for growth driven by anticipated
emerging trends and proven technological advantages and has generated strong returns for its LPs over a
ten-year period.
© Preqin Ltd. www.preqin.com 4Preqin Territory Guide: Greater China 2022
Key developments in
China’s economy
China lowered its GDP growth target amid policy maneuvers toward
‘common prosperity’ and ‘dual circulation’, while geopolitical tensions
add uncertainty to the growth of private markets
The Chinese government announced its GDP target In pursuit of ‘common prosperity’
of around 5.5% growth in March this year, the lowest To improve domestic demand and consumption,
compared to prior decades. This target was over 6% China has announced the Dual Circulation Policy,
last year, which the country met with an expansion aiming to increase domestic consumption while
of 8.1%. The lower GDP target for 2022 extends from maintaining openness to international investments.
the policy pivot announced in the 14th five-year plan, This departs from the previous export-led economic
which now focuses on ‘high-quality GDP growth’. model, which allowed China’s economy to grow at
This means that China will rebalance its economy in an average of 9% from 1989 to 2021 as the world’s
three key aspects: low-cost factory. China now wants to transition its
• to focus on domestic demand and consumption manufacturing sector to key high-end sectors such
rather than external; as electrical equipment, information technology,
• to move from reliance on the state to the private robotics, and new energy vehicles (NEVs)4 as part
markets, and of the ambitious Made in China 2025 program. It's
• to transition from a high to a low-carbon already a global leader in the NEV sector. As early as
economy.3 2017, Chinese cities were using electric buses as a
3
https://thedocs.worldbank.org/en/doc/7aa7a16968768ccb51f1818654d42561-0070012021/original/CEU-December-2021-ENG.pdf
4
https://www.china-briefing.com/news/made-in-china-2025-explained/
Fig. 1: Nominal GDP
16
14
12
10
$bn
8
6
4
2
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: World Bank
© Preqin Ltd. www.preqin.com 5Preqin Territory Guide: Greater China 2022
mode of public transport,5 and in 2021 alone, China Policy impact on private capital
exported nearly 500,000 electric vehicles – more than Moving from a reliance on the state to the private
half of the world’s total output.6 markets has been a theoretical goal since then
leader of the Chinese Communist Party, Deng Xiao
At the core of the Dual Circulation Policy is the Ping, famously said in the 1960s: “Black cat or white
ideology of ‘common prosperity’— that the fruits of cat, if it can catch mice, it’s a good cat.” However,
economic development are primarily shared by the in recent years, the role of the state in the economy
Chinese people in an equitable way. To that end, the has in fact been strengthened. Last year’s regulatory
government increased taxes to distribute income shake-ups sent strong signals to private markets
from the rich to the poor, announced curbs on tax that paying attention to China’s long-term policy
evasion, limited working hours in the tech sector, decisions is key to investing in China. Conversely,
and banned for-profit tutoring, among other moves. ignoring signs and messages from the government is
At the same time, it set borrowing thresholds under done at investors’ peril. In edtech, GPs and LPs failed
‘three red lines’ for property developers to rein in to respond to signs that the government planned to
excessive credit and take the heat out of a potential regulate the sector, only to have their businesses
housing bubble. Housing prices and sales have fallen severely affected by the ban on for-profit tutoring.
as a result. Similarly, borrowing limits for real estate developers
were announced in August 2020, but developers did
A major headwind to economic growth for China is not act quickly to comply.
a looming demographic challenge. Its population is
rapidly ageing—the number of people aged 65 and China’s consumer tech industry is arguably among
older has increased by 60% over the past 10 years, those hardest hit by regulatory pressure. The
and now account for almost 14% of the population, Chinese government ordered ride-hailing platform
according to the latest census, released in May Didi to stop user registration last year ahead of its
2020.7 While this is still lower than other developed planned $4.4bn IPO on the New York Stock Exchange,
economies – 21% in the European Union and 28% in citing data security concerns. Instead, Didi has
Japan8 – the pace of ageing may lead to a shrinking plans to delist from the US and list in Hong Kong.
workforce, posing problems for productivity and E-commerce giant Alibaba and food delivery giant
social spending. Meituan were investigated by antitrust authorities
5
https://www.bloomberg.com/news/articles/2019-06-27/why-china-is-winning-the-electric-bus-race
6
https://asia.nikkei.com/Spotlight/Electric-cars-in-China/China-led-world-with-500-000-electric-car-exports-in-2021
7
http://www.stats.gov.cn/english/PressRelease/202105/t20210510_1817185.html
8
https://data.worldbank.org/indicator/SP.POP.65UP.TO.ZS
Fig 2: Domestic consumption
70%
Final domestic consumption
60%
50%
(% of GDP)
40%
30%
20%
10%
0%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: World Bank
© Preqin Ltd. www.preqin.com 6Preqin Territory Guide: Greater China 2022
for alleged monopolistic conduct in their respective regulations surrounding environmental information
sectors.9 Last month, China’s top regulator signaled disclosure, and in December 2021, the Ministry
that streaming services, social networks and online of Ecology and Environment released new
messaging services will have to restrict children’s environmental disclosure rules. The rules came
usage, in line with requirements for online gaming into effect in February 2022, mandating that five
platforms. Failing to do so might bring about types of enterprises must disclose environmental
administrative penalties. The announcement information, including key polluting enterprises, and
triggered a sell-off in the shares of Chinese listed companies at all levels.10 These developments
internet companies. will spur investments in sustainability-related
sectors, such as NEVs and renewable energy.
Investors and fund managers have grown cautious
with regard to investing in Greater China. According Geopolitical tensions
to a survey conducted by Preqin in November 2021, This year, all eyes are on how the Russian invasion
27% of private equity fund managers said that they of Ukraine will impact on the Chinese economy and
will be targeting China in the next 12 months, which US-China relations. China has not condemned the
is significantly lower than 38% in 2020. war nor imposed sanctions, compared with severe
sanctions by many other nations. Many countries
On the other hand, there is evidence that Asia-based have cut Russian banks off from SWIFT, the global
fund managers remain committed to China. With four cross-border payments messaging system, isolating
offices in the Greater China region, global venture the country and limiting its ability to access foreign
capital firm Sequoia Capital invested $20bn across reserves. According to US sources, Russia has asked
over 200 deals. It is currently raising four funds China for military equipment to support its invasion
dedicated to Chinese investments. Local private of Ukraine,11 and if China extends help, the US has
equity firms such as IDG Capital, Primavera Capital said the consequences will be severe.
and Oceanpine Capital have continued making
venture capital investments. The country’s tech Underlying these hot-button issues is the ongoing
giants have also actively participated in China-based US-China trade war, which persists despite the
venture capital deals, with e-commerce powerhouse change in US administration. Biden has not undone
Alibaba Group participating in 47 deals amounting to tariffs levied by his predecessor on China, which may
$5.2bn, and TikTok-owner ByteDance participating in have negatively impacted dealmaking. More crucially,
over 50 deals worth $1.3bn in 2021. Chinese companies listed in the US markets now face
challenges amid more stringent rules set by the US
The nationwide push towards decarbonization will Securities and Exchange Commission (SEC) under
generate new investment opportunities. China has the Holding Foreign Companies Accountable Act. The
announced its goal of achieving carbon neutrality regulator will ban foreign companies listed in the
by 2060 and launched its national carbon market US from trading if their auditors do not comply with
in July 2021 with the aim of becoming the world’s requests for information. Fast food giant Yum China
largest. The National Emissions Trading Scheme and biotechnology group BeiGene are some of the
aims to consolidate the seven regional pilot markets companies named by the SEC, which will be forced to
that enable trading in carbon emissions allowances. delist from the New York Stock Exchange and Nasdaq
Carbon trading infrastructure and capabilities are set exchange if their three-year audit records cannot be
for further improvement in the country. inspected. However, Beijing has blocked the Chinese
auditors of these companies from complying with
Additionally, ESG reporting is becoming more such requests, with the exception of companies that
important in China. Last year, significant progress do not gather sensitive data.12
was made as Shenzhen started to implement
9
https://www.bloomberg.com/news/articles/2022-02-23/why-china-keeps-on-targeting-its-technology-giants-quicktake
10
https://www.china-briefing.com/news/what-is-esg-reporting-and-why-is-it-gaining-traction-in-china/
11
https://www.ft.com/content/30850470-8c8c-4b53-aa39-01497064a7b7
12
https://www.ft.com/content/6ccdaab1-6334-47ae-81f4-84320922cb40
© Preqin Ltd. www.preqin.com 7Preqin Territory Guide: Greater China 2022
Local Chinese authorities continue to be open to suspending public transport. Almost all Chinese
foreign investments. Some have released investment cities require visitors to complete a minimum 14-
plans worth billions of dollars and introduced day centralized quarantine at a designated facility.
incentives to attract foreign investment in advanced The capital city of Beijing has the strictest rules—
technology. At the same time, China has revised the visitors must also self-isolate at home for another
Negative Lists that govern foreign investments under seven days and monitor themselves for yet another
the 2021 National List and 2021 Pilot Free Trade seven days. These measures have caused business
Zones List. These lists further remove restrictions on uncertainty and strain supply chains, and could affect
foreign investment in certain industries in China. For the flow of foreign investments.
instance, foreign investors can now invest in vehicle
manufacturing in the same way as Chinese domestic Understanding the challenges and headwinds
investors.13 ahead, investors’ attitudes are mixed towards China.
Some have hit pause, while others believe that
COVID-19 headwinds paying attention to China’s long-term strategies and
Moving into the second half of 2022, industry players investing in key growth sectors, such as robotics
are observing whether China can maintain with and NEVs, can remain a winning strategy. Despite
its zero COVID-19 policy, even as the rest of the regulatory risks, China remains an emerging
world relaxes restrictions. Chinese authorities have economy, open to foreign investments, with a
continued to rein in new outbreaks by introducing burgeoning middle class.
strict measures such as city-wide lockdowns and
13
https://www.garrigues.com/en_GB/new/china-issues-new-versions-negative-lists-foreign-investment
© Preqin Ltd. www.preqin.com 8Preqin Insights+ Get unique and actionable insights, so you can make the best strategic decisions Track the progress and outlook for each asset class Stay informed of the performance for every asset class, and understand the regional variations that can give you the edge in your market. Discover emerging risks and opportunities Navigate a constantly shifting landscape, and identify the opportunities and pitfalls that could make the difference to your strategies’ success. Incorporate actionable insights into your strategy Our experts have a combination of vast industry knowledge and data-expertise, providing you with meaningful data insights and forecasts, that can be inserted into your strategic planning. Access our Global Alternatives Reports Keep up with the latest market intelligence, trends, and analysis from across the industry in our Global Alternatives Reports, available exclusively with a Preqin Insights+ subscription. Take full advantage of our research, insights, and analysis. Contact us about a Preqin Insights+ subscription today: info@preqin.com
Preqin Territory Guide: Greater China 2022
Navigating uncertainty
in China’s PEVC
markets
Deal activity remains strong despite regulatory risks, but IPOs remain
challenging
Private equity and venture capital (PEVC) industries There was also a huge increase in the number of
account for an overwhelming $1.78tn of the buyout deals. A total of 223 deals were concluded,
$1.92tn total private capital industry assets under up 69% year on year, amounting to $33bn (Fig. 6).
management (AUM) based in Greater China (as Aggregate deal value was up only 9%, however,
of June 2021). Venture capital AUM, which stood indicating that the average deal size has shrunk.
at $675bn as of June 2021, grew by 34% since
December 2020 (Fig. 3). In terms of fundraising, 194 Greater China-focused
PEVC funds closed in 2021, the lowest since 2009,
Despite regulatory shake-ups in private markets and 45% lower year on year. Interestingly, despite
last year, a total of 5,611 venture capital deals significantly fewer funds closing in 2021, they raised
were completed in 2021, up 34% year on year. The an aggregate of $72bn, surpassing the previous
aggregate deal value of $133bn is 48% more than the year’s $50bn by 43%. Venture capital funds raised
previous year and more than double that of 2019 (Fig. the most at $25bn, or 35% of the total, followed by
4). Dry powder climbed to record levels, reaching growth funds, which raised $22bn, or 30% of the total
$105bn as of June 2021. (Fig. 10).
Fig 3: Greater China-based private equity assets under management by fund type, 2010 - 2021
2,000
Asset under management
1,800
1,600
1,400
1,200
($bn)
1,000
800
600
400
200
0
Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Jun-21
Venture Capital Growth Buyout Others
Source: Preqin Pro
© Preqin Ltd. www.preqin.com 10Preqin Territory Guide: Greater China 2022
Fundraising of RMB funds continued to fall from giants Tencent Holdings and Ant Group. This also
the highs between 2016 and 2018, which saw the illustrates that the line between private equity and
aggregate capital raised per year average over venture capital is blurring, as private equity players
$100bn. In 2021, 135 RMB funds raised $27bn, or enter the venture capital space to buy companies at
34% lower than 2020, reflecting decreased demand lower valuations.
from domestic investors. On the other hand, there
was a spike in USD funds the same year as 57 USD In the buyout space, the $6.6bn bail-out of Hong
funds raised a record $45bn, 49% higher than the Kong-based investment holding company Huarong
previous record in 2019. International Financial Holdings was the largest
deal in 2021 and 2022 year to date. Led by state
For the first time since 2008, the capital raised by enterprise CITIC Group, it prevented Huarong from
USD funds overtook RMB funds in 2021 (Fig. 11). defaulting on billions of dollars in international debt,
This trend looks set to continue as international LPs effectively preventing a Lehman Brothers situation in
seek a presence in China’s promising policy-aligned China. Huarong is known as China’s largest bad-debt
sectors. For instance, NIO Capital, an investment manager, and it incurred a huge loss last year. The
firm under the electric vehicle maker NIO, recently rescue of Huarong contrasts with the treatment of
achieved final close of a flagship USD venture fund privately held Evergrande, which did not get bailed
at $376mn. The fund will focus on investments in out despite having over $300bn in liabilities.
energy, automobiles, and deep technology industries.
Exits under scrutiny
PEVC opportunities in property Chinese tech start-ups attempting to file for IPOs
The property sector saw more venture capital and on US stock exchange are being scrutinized by
buyout deals in the aftermath of regulatory changes. both the US Securities and Exchange Commission
The largest in 2021 was the $6.0bn pre-IPO (initial (SEC) and Chinese regulators. The SEC requires
public offering) round of Beijing-based Wanda Light Chinese companies listing on US stock exchanges
Asset Commercial Management, the commercial to disclose whether they are owned or controlled by
property management unit of conglomerate Dalian a government entity, and to allow audit inspections.
Wanda Group. The round was led by Hong Kong- However, Chinese regulators forbid start-ups from
based private equity firm PAG and pushed the allowing foreign audit inspections, with the exception
business’ valuation to $28bn post-money. Other of companies that do not gather sensitive data. Back
investors included property developer Country home, China has launched domestic tech boards
Garden, private equity firm CITIC Capital, and tech STAR and ChiNext with registration-based public
Fig 4: Number and aggregate deal value of venture capital deals* in Greater China, 2018 - 2022 YTD
Aggregate deal value ($bn)
No. of deals
Source: Preqin Pro. Data as of February 2022
*Figures exclude add-ons, grants, mergers, secondary stock purchases, and venture debt
© Preqin Ltd. www.preqin.com 11Preqin Territory Guide: Greater China 2022
offering rules, but scrutiny from regulators has program in Shanghai that allows investment shares
caused IPO applicants to withdraw filing plans.14 of PEVC firms to be transferred, which was approved
in November 2021.16
While Chinese tech start-ups can still IPO on the
Hong Kong Stock Exchange, they are still at risk Key growth sectors
from policy changes. TikTok-owner ByteDance, one Investors now seek to invest in line with top-level
of China’s largest decacorns, has delayed plans to policy to manage risks. The Chinese government
file an IPO in Hong Kong to address data security favors sectors relating to core technologies, such
concerns around how it stores and manages as semiconductors, 5G applications, the Internet of
consumer information. Things, and autonomous driving. In the 14th five-
year plan, the Chinese government announced that,
In terms of buyout exits, a record 61 deals were under the Made in China 2025 program, it will also
completed in 2021, amounting to $11bn, which is boost development in the following sectors: new
46% higher than 2020 (Fig. 7). Almost half of the materials, new energy, aerospace, biotechnology,
buyout exits in 2021 were IPOs. The largest deal was advanced manufacturing, and integrated circuits.
the trade sale of Hong Kong-based forwarder Apex Sustainability-related sectors will also do well
Logistics International to Swiss logistics provider as China will require private capital to achieve its
Kuehne + Nagel. The takeover is part of Kuehne + ambitious goal of transitioning to a carbon-neutral
Nagel’s expansion in Asia after consolidating its economy by 2060. Given the difficulties of listing and
footprint in Europe and North America.15 operating in the US, investors will also back domestic
companies seeking regional expansion while avoiding
As IPO exits become challenging, the number of those with a long-term plan to expand into the US.
secondary sales to GPs has increased. Fourteen
buyout deals were sold and acquired by private equity These will be key growth sectors for potential
firms in 2021, more than tripling that of 2020 (Fig investors, offering plentiful dealmaking opportunities
7). There were also 18 sales to GPs in the venture in China’s PEVC industries. Challenges in listing may
capital space, doubling that of 2019 (Fig. 5). This affect long-term investor confidence but could also
trend could be due to institutional investors seeking contribute to the growth of China’s secondary buyout
to sell early before listing portfolio companies and market.
is helped by regulatory changes such as the pilot
14
https://www.reuters.com/article/us-china-tech-exchanges-analysis-idCAKBN2BY0UL
15
https://www.freightwaves.com/news/breaking-news:-kuehne-nagel-buys-hong-kong-forwarder-apex
16
http://english.www.gov.cn/news/topnews/202112/01/content_WS61a6d326c6d0df57f98e5da2.html
Fig 5: Venture capital exits in Greater China by type (number and aggregate deal value), 2018 - 2022 YTD
Aggregate exit value ($bn)
No. of exits
Source: Preqin Pro. Data as of February 2022
© Preqin Ltd. www.preqin.com 12Preqin Territory Guide: Greater China 2022
Fig 6: Number and aggregate value of buyout deals in Greater China, 2018 - 2022 YTD
Aggregate exit value ($bn)
No. of exits
Source: Preqin Pro. Data as of February 2022
Fig 7: Buyout exits in Greater China by type, 2018 - 2022 YTD
Aggregate exit value ($bn)
No. of exits
Source: Preqin Pro. Data as of February 2022
© Preqin Ltd. www.preqin.com 13Preqin Territory Guide: Greater China 2022
Fig 8: Largest decacorns in China
Post-money Total no. of Primary
Portfolio company valuation ($bn) funding rounds industry Verticals
Financial Processing & payment
Ant Group Co., Ltd. 150 10
services infrastructure, mobile apps
Machine learning, mobile
ByteDance Ltd. 100 13 Media
apps, social media
Artificial intelligence, big
Cainiao Network Technology Co., Logistics & data, cloud computing, iot
29 4
Ltd distribution (internet of things), mobile
apps
Artificial intelligence,
JD.com Digital Technology Financial financial data, blockchain,
28 6
Holdings Co., Ltd. services lending, wealth management,
mobile apps
Xingyin Information Technology
20 8 Internet E-commerce, mobile apps
(Shanghai) Co., Ltd
Beijing Yuanli Education
17 11 Software Edtech, mobile apps
Technology Co., Ltd
Artificial intelligence, big
Financial data, blockchain, cloud
Qianhai Webank Bank Co Ltd 16 3
services computing, fintech, mobile
apps
Consumer
SZ DJI Technology Co., Ltd. 15 8 Artificial intelligence, drones
products
E-commerce, manufacturing,
SheIn Group Limited 15 5 Internet
mobile apps
Consumer
Genki Forest Beverage Co. Ltd 15 6 N/A
products
Source: Preqin Pro, Data as of February 2022
Fig. 9: Greater China-focused private equity & venture capital fundraising, 2008 - 2022 YTD*
Aggregated capital raised
No. of funds closed
($bn)
Source: Preqin Pro. Data as of February 2022
*Excluding Government Guidance Funds
© Preqin Ltd. www.preqin.com 14Preqin Territory Guide: Greater China 2022
Fig. 10: Aggregate capital raised by Greater China-focused private equity & venture capital funds by
fund type, 2008 - 2022 YTD*
160
Aggregate capital raised
140
120
100
($bn)
80
60
40
20
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
YTD
Year of final close
Buyout Venture capital Growth Others
Source: Preqin Pro. Data as of February 2022
Fig 11: Aggregate capital raised by Greater China-focused private equity & venture capital funds: RMB- vs.
USD-denominated funds, 2008 - 2022 YTD*
Aggregate capital raised
($bn)
Source: Preqin Pro. Data as of February 2022
*Excluding Government Guidance Funds
© Preqin Ltd. www.preqin.com 15Preqin Territory Guide: Greater China 2022
League tables
Fig. 12: Top performing Greater China-focused RMB-denominated private equity & venture capital funds
(vintages 2017-2019)
Fund size Net IRR Date
Rank Fund Firm Vintage (RMB mn) Fund type (%) reported
Enlight
Venture
1 EGP RMB Fund I Growth 2019 350 108.0 30-Jun-21
(general)
Partners
Immensus Venture
2 Immensus RMB Fund I 2018 340 83.0 30-Jun-21
Capital (general)
Unity Venture
3 Beijng Jiuhe Ruizhi Fund 2019 507 47.9 31-Dec-21
Ventures (general)
Eminence Venture
4 Eminence Ventures RMB I 2017 100 33.5 31-Dec-21
Ventures (general)
Eastern
5 Eastern Bell Capital RMB Fund V 2018 735 Growth 31.7 30-Jun-21
Bell Capital
Hanne Venture
6 Hanne Capital RMB Fund I 2018 64 30.5 30-Jun-21
Capital (general)
Redhill Venture
7 Redhill Venture Fund 2018 74 28.2 31-Mar-21
Capital (general)
Venture
8 Ally Capital RMB Fund II Ally Capital 2017 75 28.0 31-Dec-21
(general)
Hidden Hill Modern Logistics Hidden Hill
9 2018 1,569 Growth 28.0 30-Sep-21
Private Equity Fund Capital
Langsheng Venture
10 Langsheng Investment Fund IV 2017 500 14.4 30-Jun-21
Investment (general)
Source: Preqin Pro
© Preqin Ltd. www.preqin.com 16Preqin Territory Guide: Greater China 2022
Fig. 13: Top performing Greater China-focused USD-denominated private equity & venture capital funds
(vintages 2017-2019)
Fund size Net IRR Date
Rank Fund Firm Vintage (USD mn) Fund type (%) reported
Loyal Valley Capital Advantage Loyal Valley
1 2018 390 Growth 83.0 30-Sep-21
Fund I Capital
Expansion /
2 GGV Capital VI Plus GGV Capital 2017 250 58.5 30-Sep-21
late stage
HighLight
3 HighLight Capital USD Fund II 2017 250 Growth 58.0 30-Jun-21
Capital
Eastern
4 Eastern Bell Capital USD Fund I 2019 365 Growth 49.2 30-Jun-21
Bell Capital
Loyal Valley Capital Advantage Loyal Valley
5 2019 465 Growth 47.0 30-Sep-21
Fund II Capital
Eminence Venture
6 Eminence China Enterprise Fund 2017 22 45.2 31-Dec-21
Ventures (general)
Lilly Asia Venture
7 Lilly Asia Ventures Fund IV 2017 450 43.6 30-Jun-21
Ventures (general)
8 IDG Breyer Capital Fund IDG Capital 2019 2,870 Growth 42.3 30-Jun-21
9 Lyfe Capital USD Fund II Lyfe Capital 2017 288 Early stage 41.8 30-Sep-21
Venture
10 IDG China Venture Capital Fund V IDG Capital 2017 590 39.0 30-Jun-21
(general)
Source: Preqin Pro
Fig. 14: Largest Greater China-based private equity & venture capital funds closed in five years (2017-2021)
Fund size Final close
Rank Fund Firm (mn) Fund type Industry focus date
1 Boyu Capital Fund V Boyu Capital 5,000 USD Growth Diversified 15-Jul-21
Zheshang
2 Ningbo Hongxi Fund 24,000 RMB Growth Diversified 14-Mar-18
Venture Capital
Zheshang Venture
3 Hangzhou Fenhua Fund 25,010 RMB Diversified 14-Sep-18
Venture Capital (general)
4 Boyu Capital Fund IV Boyu Capital 3,600 USD Growth Diversified 08-Mar-19
Information
technology,
5 IDG Breyer Capital Fund IDG Capital 2,870 USD Growth 23-Aug-21
telecoms &
media
6 DCP Capital Fund I DCP Capital 2,500 USD Growth Diversified 16-Apr-19
Venture
7 Yunfeng Fund III YF Capital 2,500 USD Diversified 03-Aug-18
(general)
FountainVest China Growth FountainVest
8 2,100 USD Growth Diversified 22-Sep-16
Partners III Partners
Morningside China USD Information
9 5Y Capital 1,700 USD Growth 12-Apr-21
Fund II technology
Xiong'An Global Blockchain Tunlan Early stage: Business
10 1,600 USD 09-Apr-18
Innovation Fund Investment start-up services
Source: Preqin Pro
© Preqin Ltd. www.preqin.com 17Preqin Territory Guide: Greater China 2022
Fig. 15: Most consistent top performing fund managers (all vintages)
Overall no. No. of
of funds funds No. of funds Average
with quartile in top in second quartile
Rank Firm Headquarters ranking quartile quartile ranking
1 Capital Today Hong Kong SAR, China 3 2 1 1.3
2 HighLight Capital Shanghai, China 5 3 2 1.4
2 Principle Capital Shanghai, China 5 3 2 1.4
Trustbridge
4 Hong Kong SAR, China 6 4 1 1.5
Partners
5 Eminence Ventures Shanghai, China 3 1 2 1.7
Hillhouse Capital
5 Beijing, China 3 1 2 1.7
Management
CAS Investment
7 Beijing, China 4 2 1 1.8
Management
7 Harvest Capital Shanghai, China 4 2 1 1.8
7 Joy Capital Beijing, China 4 2 1 1.8
10 Eastern Bell Capital Shanghai, China 6 2 3 2.0
Source: Preqin Pro
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