Top-tier PE/VC Giants Actively Set Up Secondary Private Equity in China Market
In recent years, top tier PE/VC firms such as Hillhouse, CDH, Sequoia China, CPE and Costone have extended their business to the secondary market and actively invested in setting up secondary securities private equity funds. For example, Liren Investment, a $10 billion securities private equity fund that has become a big hit in the past two years, is an independent platform under Hillhouse that is deeply involved in secondary market investment; Runhui Investment under CDH has been established for 15 years and its asset size will reach RMB 64 billion by the end of 2020; CPE has also set up a securities private equity fund "Beijing Yuanfeng Private Equity Fund Management Partnership (Limited Partnership) ".
Costone Capital announced in 2017 that it would enter the secondary market through an independent subsidiary to open up the industry chain. Costone Capital managing partner Chen Yanli said, first of all, the company already has VC, PE, M&A, directed issue and other products, the secondary market business is carried out along the company's strategic deployment, making the business layout more complete; secondly, to meet investors' diversified asset allocation needs, investors who allocate Keystone PE and M&A products can also choose Keystone secondary market products in the future; thirdly, data show that the past 11 years, China's secondary market index return of about 14.5%, the domestic stock fund index return of about 16%, is quite a good allocation choice; fourth, at present is a good opportunity to enter the secondary market, in a sense, the behavioral logic of primary and secondary market investment has been converged; fifth, the secondary market trading volume, investment to invest in industry leading stocks, and most of the leading companies are listed companies.
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