PE firms in China clamor to sell matured assets

By Rizza Sta. Ana

Sep 23, 2013 03:41 AM EDT

According to a South China Morning Post report, suspension of initial public offerings in mainland China had private equity firms wanting to sell its maturing assets to appease investors's anxiety.

Internal rates of return where in their 30s prior to the postponement of IPO listings. Private equities are now seeing internal rates of return clocking at single digits only.
The China Securities Regulatory Commission has shut down the listing market in China last November 2012 in the hopes to reduce insider trading incidents that has marred the economy as of late. The listing market includes the Shenzhen and Shanghai bourses. Both Shanghai and Shenzhen stock exchanges are regarded as the most important exit points for private equity investors in the last twenty years. Private equity firms in China receive investment from institutional investors and well-endowed clients who had agreed to invest in risky private startups with a 10-year lock up period. Required annual return was at least 15%.

The SCMP report said that the opening of the initial public offering market would happen before or after China's National Day holiday, which is on October 1. 

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