Foreign Private Equity Investment in China

By Neil Torpey
[email protected]

Foreign investment in China by private equity and venture capital funds rose significantly in 2004 and there are positive signs that additional investments will be made by these investors in 2005 and beyond.

Since an important path to liquidity for private equity investors is through initial public offerings (IPOs), the receptiveness of the US public equity markets to IPOs by China-based companies has been encouraging.  A review of IPOs by China-based private-equity-backed companies on Nasdaq or the New York Stock Exchange completed in the last 12 months reveals some interesting trends in the types of companies that are attracting private equity investments.