China Data Insight (Mid-Year 2019)
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A decline in private capital activity in China was, in some respects, inevitable after the industry reached new fundraising and investment records in 2018. A confluence of factors may have contributed to a 34% year-over-year decline in capital invested in China in 1H 2019: increased uncertainty stemming from the US-China trade war, slowing growth and rising debt in some sectors of the economy, and a cooling venture market. Following a record-breaking fundraising year in which 9 China-focused funds raised USD1 billion or more, fundraising has also declined. Yet as evidenced by Boyu Capital and DCP Investments’ fund closes of USD3.6 billion and USD2 billion, respectively, China-focused fund managers are still able raise significant sums, and the aggregate decline could be attributed to a significant number of GPs having already raised capital for China last year.