Interpretation of China’s private equity market

In 2018, a great number of new regulations of the private equity market were released one after another. “[In terms of the regulation of China’s securities investments] what remains unchanged is the constant change,” said Wang Yang, a partner at Guantao Law Firm during CBLJ Forum 2019 in Beijing.

On the topic of “Market trend analysis of PE funds and equity investment”, Wang and Chen Xiaochuang, partners at Guantao Law Firm, Bao Jingming, the general manager of General Technology Venture Capital, Sun Yonggang, a partner at Zriver Capital, Zhang Huaquan, the legal director at CSTF Fund Management and Zhu Ke, director and deputy general manager of Guiyang Venture Capital, all participated in the discussion.

According to Wang, the buzzword of the equity investment market is “returning to rationality”; and the “80/20 rule”, which illustrates 20% funds occupy 80% capital, will become ever more prominent. Bao Jingming agrees with Wang’s point of view. He believes that for any market or group, once competition kicks in, or the market develops to a certain stage, the 80/20 rule will naturally take hold, and this poses a challenge to fund management. “The key issue lies in how to find your core competence and how to position your own funds. It hinges on the capability of every management institution,” he said.