Private Equity Industry in Hong Kong
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Overview
- Private equity is an asset class investing in equity of non-publicly traded companies. The common investment strategies of private equity firms include, but are not limited to, venture capital, leveraged buyouts, growth capital, and distressed investment. Venture capital is one of the most popular strategies used by private equity firms in Hong Kong.
- Hong Kong is the second largest private equity centre in Asia, providing local and regional start-up companies with a readily available source of equity financing.
- The majority of private equity funds in Hong Kong come from overseas and invest in companies in the region.
- Hong Kong's stock market offer easier exits for venture investments. Among private-equity-backed IPOs, the Hong Kong Stock Exchange has hosted a major share of Chinese mainland investors’ sales.
Industry Data
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2011
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Number of private equity firms
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355
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Capital under management (US$ million)
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68,123
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Source: Asian Venture Capital Journal
Private equity is an asset class investing in equity of non-publicly traded companies. The common investment strategies of private equity firms include, but are not limited to, venture capital, leveraged buyouts, growth capital, and distressed investment. Venture capital is one of the most popular strategies used by private equity firms in Hong Kong.
Range of Services
Hong Kong is the second largest private equity centre in Asia, managing about 18% of the total capital pool in the region, trailing the Chinese mainland. According to the latest available figures, there were 355 Hong Kong-based funds with capital under management amounting to more than US$68 billion as of end-2011.
Exports
Hong Kong's private equity industry is highly export-oriented. The majority of the regional funds are based in Hong Kong. An overwhelming majority of private equity funds in Hong Kong come from overseas and invest in companies in the region, including Australia, Singapore, India, Korea, Japan and the Chinese mainland.
Industry Development and Market Outlook
With the growing focus of venture capital investment in the Greater China region (comprising the Chinese mainland, Taiwan and Hong Kong), the Chinese mainland has become the largest private equity centre in Asia. Hong Kong's private equity industry has developed strong expertise of investing in Asia, in particular the mainland. Mainland-related investment also provides a major theme for Hong Kong's venture capital fund-raising activities. Hong Kong will continue to be an ideal platform for the exit private equity investment, with its IPO fund-raising achieving the world’s largest in three consecutive years.
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