Exit via IPO in China

By virtue of its sheer size and incredible growth over the last decade, China presents one of the most compelling destinations for portfolio and direct investment. Yet for all its promise, private equity as an asset class faces a number of challenges in China, particularly when it comes to exiting investments and realizing returns. The country’s capital markets remain underdeveloped, lacking the stability of a robust base of institutional investors, and leaving them inordinately prone to the whims and exuberance of China’s retail investors.

GPs face numerous uncertainties when it comes to exiting investments via IPO—from concerns over future capital market developments, to trade-offs between onshore and offshore listings, to opaque regulatory processes. This article sheds more light on these challenges with insights from experts in China, Hong Kong, Singapore, and the United States.