Ten Years in Action: New Vistas in Asset Management Industry

Despite some positive signs of growth into the second quarter, a significant recovery in VC investment did not seem possible any time soon. Concerned with the macro-economic situation and the overall VC/PE market, LPs remained highly cautious in making investment decisions. Funding, therefore, had become the biggest problem for VC/PE market in 2013. Capital on mainland China saw negative growth for the first time in recent history. Given the dim economic prospect, blocked exits and the dramatic shake-up within the industry itself, a recovery was yet to take hold as investors scaled back and withdrew from market. Further complicating matters was the fact that the IPO halt on China's A-shares market had been dragging on for eight months, the eighth such close-down in history, with no definite date for resumption. In the first half of 2013, not a single IPO was launched onshore, leading to a marked decline in VC/PE exits.

However, the second half of 2013 got off to a good start. Funding in the VC market took a turn for the better and an increasing number of funds succeeded in obtaining funding for investment. The size of financing and the number of investments also increased over the previous month. Coupled with welcoming changes in regulation polices and positive shifts in the industry, the VC/PE market got a new lease on life. More encouragingly, exits via M&A and trade sale have been on the rise to be the preferred harvest strategy when cashing out through IPO remains on hold. And as the "new third board" (a new agency share transfer system) expands its pilot across the country, more exit possibilities may open up for VC/PEs in the future. 

The VC/PE market is finally out of the woods. But the ride in 2014 is likely to be bumpy. Turmoil and flux will continue to be the order of the day for the VC/PE industry. But in the middle of difficulty lies plenty of opportunities, too.

As we brace ourselves for the coming journey, the 13th CVCF hosted by Zero2IPO Group brings together the best and brightest of the VC/PE industry to find solutions to the challenges we face. It affords an ideal forum for great minds to converse and great ideas to emerge to illuminate our way out of uncertainties and forward to a bright future.