Market conditions affect the investment of PE fund at the end of year

Zhou Xiaoyun into the end of the year, subject to the LP (limited partner) funds are not in place, and other factors, the investment rhythm of some private equity began to slow down markedly, and some even entered the "Sit Down" state. A private equity fund investment manager in Shanghai recently told the first financial daily that the project team in the last month or two has not found a new project for investment, so it has almost entered the "hibernation state."　　From the general situation in the industry, usually at the end of some PE funds investment rhythm will obviously slow down, into the observation period. "PE is now more cautious than ever, and it is not daring to invest without a detailed investigation beforehand," he said. In the past, many private equity funds to invest, and look forward to IPO and other ways to quickly return profits. But now the trend is to pay more attention to participate in the enterprise specific management practices, focus on the promotion of value and then choose the right time to quit.　　Chen Jingwen, senior manager of the Trading advisory service at Kyoto Day China accounting firm, said to reporters. Recently, China's VC/PE (venture capital/private equity investment) investment Market overall cooling, the data show that in the third quarter after the slowdown in investment growth, investment activity in October reached the lowest level this year.　　It now appears that there is a tendency for further contraction in November. Chen Jingwen said that from the point of view of the situation, some private placement in the fund-raising has some difficulties.　　In particular, some foreign-backed LP, the past many LP's 40%~60% investment quota is through the bank financing channel completes, but now the bank provides the financing quota and the supply quantity shrinks, the regulation is stricter. The next step, analysts predict, is that some new funds and poorly run funds with no past track record will be harder to raise.　　The future of the entire PE industry will undergo a new round of shuffling process. In addition, the current private equity exit structure is changing. In the US market, only 9% of private-equity respondents believe they will opt out of IPOs in the future, compared with more than 90% per cent of their exit from strategic acquirers and second-hand markets, according to a report by the Kyoto Day China survey.　　Conversely, in emerging markets, 37% per cent of respondents still believe that the IPO exit is the main option. It is noteworthy that, although China's IPO situation is better than the global average this year, but according to the survey, only 25% of respondents in the Chinese market expect higher private-equity exit activity next year, while 75% of respondents believe that the exit activity will drop next year, significantly lower than in other emerging economies such as Brazil.　　In addition, mainland Chinese GP (general partners) generally believe that the future return on investment will fall. Analysts pointed out that in the PE boom around 2008, many of China's private equity funds to 20 times times, 30 times times the price-earnings ratio of investment companies, but now the market situation is clearly not high expectations. So many Chinese private equity firms have opted to sit tight so that they can choose the right time to quit.