More than US$8.1 billion in private equity was raised in the first half of this year in China, the most on record, according to Zero2ipo Group.
The figure represents a 19 percent rise from a year ago and it's now likely private equity will easily surpass last year's US$11.17 billion, the investment research firm said in a report yesterday.
The record volume is partly credited to fundraising by 20 large private equity funds, which scooped at least US$100 million each, Beijing-based Zero2ipo said.
Altogether, the mainland saw the launch of 73 new private equity funds, 62 of which were yuan-denominated, indicating a continued preference among investors to use the Chinese currency for investments in China.
These yuan funds raised a combined US$4.7 billion in the first six months, compared to US$3.44 billion raised by US dollar funds during the same period, according to the report.
Investors' preference for yuan-denominated funds is mainly because China's ChiNext, a Nasdaq-style board launched in 2009 in Shenzhen for start-up firms, now provides a new way for private equity firms to help start-up firms go public.
US dollar-denominated private equity funds, whose limited partners are usually foreign investors, often prefer the firms they invest in to list on overseas stock markets as they usually offer a lower price-to-earnings ratio for new listings than the ChiNext.
Meanwhile, private equity firms set up on the mainland invested in 605 projects from January to June, a rise of 56.3 percent from a year earlier.
Among them, 538 deals that have been made public involved a total investment of US$6.07 billion, a 170.4 percent climb from the same period last year.
This surpassed the US$5.39 billion sealed for all of 2010, according to the Zero2ipo report.
Much of the money went into 110 deals in the information technology industry, which grabbed a combined US$1.55 billion, nearly four times last year's total.
The auto sector, which the central government considers a key industry to be developed in the next five years, was second with a total of US$497.7 million, followed by US$382 million for clean technology, the report added.
Beijing concluded 148 deals, the most of any city, worth nearly US$1.86 billion in the first half.
Shanghai ranked second in terms of investment scale with a total of US$868.3 million, followed by Jiangsu Province and Shenzhen City.
Shenzhen sealed 69 deals, followed by Jiangsu with 66 and Shanghai with 45, according to the report.
