Foreign investors voice concern
Source: Global Times      Chen Xiaoduan
Date: 2011-4-28 11:51:00

Delegates at the 2011 China Venture Investment Conference, which opened in Shanghai on Wednesday, said that despite China's soaring market, foreign capital holders are still cautious about this year's investment plans in China.
"China now has a big bubble in both its housing and capital markets, making foreign investors cautious about putting more money into the market," Kazushige Kobayashi, managing director of global private equity group Capital Dynamics, told the Global Times at the conference. "But strategically speaking, China is still a huge market for foreign limited partners."
According to a survey by China Venture, released last Wednesday and discussed during the conference, 44.4 percent of foreign limited partners are planning to increase their China-focused allocations this year, compared to over 50 percent in 2010.
Another 33 percent of foreign limited partners said they had no interest in yuan funds, slight down on last year's findings.
Foreign limited partners were no more upbeat about returns on investments in China for the coming year, with 44 percent believing that the returns will see wild fluctuations over the next five years. Main causes for concern were overvaluations of ChiNext-listed Chinese firms as well as a potential bubble in the broader capital market in China.
According to statistics from China Venture, in 2010 there were 235 private equity funds in China raising a total $30.41 billion, an increase of 26.8 percent and 79.1 percent respectively compared to 2009. Among them, only 44 were foreign private equity funds, raising a total $11.12 billion.
"China's private equity market really took off in the last two years," Jason Zhang, managing director of Morgan Creek Capital, said during the conference. "Prior to this, we had to convince people to consider raising money in China."

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