Private equity and venture capital funds in China that once made many multiples on pre-IPO investments are facing difficult times as government policies designed to cool the economy take their toll.
There are estimated to be 3,500 of such yuan-denominated funds, with 1,084 launched just this year raising almost $69 billion, according to ChinaVenture.
In a glaring example of how lucrative such pre-IPO deals were, New Horizon Capital made a stellar unrealised investment return of 400 times from its investment in Sinovel Wind Group Co Ltd (601558.SS) after the wind power company went public in January, according to fund consultancy Zero2IPO Group.
