Deals slow over crisis
Private equity and venture capital investment on the mainland has slowed as the global financial crisis developed. But for those who are investing, current valuations can be very attractive.
'Many private equity firms in the Chinese market have had their exit time frames disrupted by the current freeze on initial public offerings ... they just don't see where the end of the tunnel is,' said Weichou Su, the managing director of Hina Group, a Beijing private equity advisory firm.
'The uncertainty and the inevitable slowdown of incoming funding instalments will cause even more troubles for companies on the receiving end of the investments.'
'I was ready to close a deal with a company. But now, I will hold on to my money and wait,' said a venture capitalist who did not want to be named. 'There is no more need to rush. No one is competing for deals.'
Instead, he is asking all the firms he invested in to redo their financial plans as the global financial crisis worsens 'to see if their revenue projections and cost structures are realistic or not'.
