China's PE market to rebound as epidemic eases: report

BEIJING - China's private equity (PE) market is expected to rebound step by step as the COVID-19 wanes and economic activities quicken resumption pace across the country, a report showed.

China's PE market saw a 22-percent decline in average deal volume last year, and renminbi funds financing further shrank for tight regulation, according to a report released by global management consulting firm Bain & Company.

In the wake of the coronavirus outbreak, the PE market contracted in both deal volume and value in the first quarter. While quarantine measures that dampened work and production will extend to the end of April, the market contraction might continue until the second quarter.

However, a rebound is expected to take place during the second half year, backed by pent-up financing needs, the report said.

"The PE market will meet multiple opportunities after the epidemic", said Li Chenghuan, Bain partner and report co-author, citing the post-SARS market performance.

Investment activities started to rebound in the fourth quarter of 2003 with sharp increase of deals in sectors which were hit hard by the containment measures, Li said.

Despite mounting uncertainties, a downturn in China's economy will not last long as economic activities gradually recover across the country, said Zhou Hao, Bain partner and report co-author.