全球和本地的私募股权投资公司在中国的比较研究_留学生作业

China, the Hard Candy for Global Private Equity 中国，全球私募股权的一块硬骨头

Comparable Study of Global and Local Private Equity Firms in China

全球和本地的私募股权投资公司在中国的比较研究

“China is hard.” (James, 23rdFebruray 2011)Tony James, the COO of Blackstone, replied when asked about China during the dinnerwith Professor Hardymon, Professor Axelson and five students from the world’s first PEmaster program at LSE. “中国是很难的一个市场。”（詹姆斯，2011年2月23日），黑石首席运营官托尼·詹姆斯，与哈代教授阿克塞尔森和世界伦敦政治经济学院的硕士课程的五个学生就餐时当被问及全球私募股权在中国市场的问题时，是这样回答的。As a Chinese native keen to be engaged into the PE industry, theauthor cannot wait to find the hidden secrets behind this somehow mysterious answer.

Sweet Candy for Private Equity China as an attractive destination for PE fundsWith “Made in China” having been a brand name for this “world factory” after China s twodecades of aggressive expansion in heavy industry and infrastructure based on its export-orientedeconomic model, now China is becoming the one of the new hot spots for international investorsescaping from the drying up developed PE market. What makes China so attractive for global PEfirms?Strong EconomyIn only one decade, China has grown from the world s seventh largest economy into the secondbiggest economy after surpassing Japan last year. China s average growth rate was more than 9%over the last 20 years, unbeatable by any other single country in the world. Even during the sixmonths right after the financial crisis, China achieved to maintain a growth rate of 8%. According tothe Economist s forecast, China will overtake America in 2019, with a projection that the averageannual real GDP growth rates and inflation rates are 7.75% and 4% respectively in China, and 2.5%and 1.5% respectively in US (The Economist, 16thDecember 2010财富，). Along with high growth rate,China has been bringing a rising middle class with a strong purchasing power, as well as wealthindividuals with an increasing interest into the private equity investment.伴随着较高的增长速度，中国已具有较强的购买力，以及个人进入私募股权投资的兴趣不断增加，带来了中产阶级的崛起。

Economic and Political Stability经济和政治稳定

With a strong balance sheet, tripe trillion of foreign reserves and prudent monetary and fiscalpolicies, China is much less vulnerable than many other counties in face of economic shocks.China s government debt remains below 50% of GDP, while household debt/GDP ratio at the end of2009 was 24%, well below those of the developed counties, where debt ratio above 60% arecommon, and the household debt/GDP ratios were 88% in the US and 65% in Japan at the end of2009 (JPMorgan, 10thJune 2010). Without heavy public budget burdens and the correspondingpublic reform schedule, which account for the instable factors in some developed countries such asUS and UK, China government is basically sitting on a large pile of money and has enough budgetsto deal with any possible issues. Moreover, although democracy issues always bring China onto theheadlines of global media, China might in fact be more stable than it appears to the westerners, atleast in the eyes of most ordinary Chinese citizens (The Economist Free exchange, 1st June 2011).And it is those people who believe that the one-political-party regime is the ideal one for Chinagiven the nowadays economic and political situation both domestically and internationally, that helpto achieve the growth miracle in China.它是那些人相信的一个政党政权，是现今中国理想的的经济和政治局势，在国内和国际，有助于实现在中国的增长奇迹。

Golden Times Passed in Developed Countries在发达国家普遍认为的黄金时代

Since the golden times for PEs have almost been over for western rich countries, global firms arenow keen to find something sweet in China. During the last 10 years, we saw Carlyle, KKR, TPG,3i, JPMorgan and Goldman Sachs moved in one by one, seeking for private equity investmentopportunities, even under a former more highly regulated investment environment for foreigninvestors. As the last big name to enter China, Blackstone took its US- and Europe-based chiefexecutives of portfolio companies to gather in Shanghai, http://www.ukassignment.org/fxgllw/ to meet senior Chinese political leadersand to discuss the expansion in China (Financial Times, 13thDecember 2010). Global PEs activeinvolvement into large transactions in China and appointment of former developed-country-basedseniors to chair China offices, suggest their inclination to shift some emphasis to China, theunexploited wonderland for private equity.

在中国，积极参与到全球私募股权的大宗交易和任命前发达国家的老年人主持中国的办事处，表明自己的倾向，并有一些重点转移到中国，

中国更是私募股权投资未开发的一块地方。

Low PE Penetration Ratio低PE渗透率

According to the most recent figures, China s PE investment-GDP ratio is only 0.16%, compared with 0.9% in the US and 1.13% in the UK. The penetration is low even compared to Israel and itsgolden BRIC peer India (Emerging Markets Private Equity Association, 14th February 2011).Given the low penetration ratio, we can expect a big room for the future development of China s PEmarket.鉴于低渗透率，我们可以预期中国市场的未来发展的一个大方向。

Deregulation and Innovation by the government由政府放松管制和创新

Institutional investors such as pension fund, insurance companies, banks, family funds, endowmentfunds and PEFOF which brought the most long-term and stable funding for PE funds, are themainstream market investors in US and Europe. However, because Chinese regulators strictlylimited insurance companies, pension funds, banks and other large organizations to invest in privateequity assets, the Chinese private equity market lacks the participation of institutional investors.Meanwhile, without real local PEFOF agencies, the market funding sources were limited to largebusinesses, governments and wealthy individuals (Source: Venture Economics & Preqin).However, fortunately, China regulators began to feel comfortable with the imported private equitymodel after several successful cases of foreign and domestic private equity funds investments, aswell as the introduction of public & private cooperation on industrial investment projects structuredbased on the PE model. They are now relaxing the restrictions imposed on institutional investors investment into PE assets. Deregulation process includes allowing certain percentage of assets to bedeployed to PE funds by insurance companies and pension funds. For example, in 2008, regulatoryapproved the National Social Security Fund (NSSF), China s national pension fund to invest up to10% of its assets in yuan-denominated PE funds and government-backed industrial investmentfunds. With an official forecasts that the assets will hit 1.5 trillion yuan by 2015, NSSF itself canmake contribution of $ 2.8 billion to the private equity sector in 2015 (Reuters, 9thMarch 2011),which is a very promising and stable domestic funding source. However, this regulation changeonly benefits the yuan-dominated funds.然而，这种调节改变有利于以人民币计价的基金。

(AltAssets, 1st June, 2004). This is a great leap for the Chinese PE regulation system forwards tothe direction favorable to foreign GPs who are interested in China. To some extent, this changereflects the mutual dependence between Chinese government and global PE specialists. Global PEsobtain good investment opportunities with government supports, while China government can cashout of the state-owned companies with long-term underperformance and meanwhile add value to itsremain stakes, after the PE specialists inject new blood into those companies and achieve a boldtransformation to better shape them. This makes a win-win strategy for both sides.这使得双方可以达到双赢。