European private equity advisory firm Epiven has released a report stating that 88% of the LPs they surveyed in Europe expect to increase their allocations towards China within the next five years. But does this really tell us anything? Most LPs will say that they don’t wish to have all their eggs in the same proverbial basket, so why wouldn’t someone surveyed say they want to branch out from their current investment base into a growing market?
On the subject of China, Guy Fraser-Sampson wrote an interesting article for Real Deals on why he feels that buyout firms looking at, and investing in China now will be let down much like PE firms were in the early 1990’s and that the country is about 10 years away from being truly attractive for private equity. Worth reading!