The outlook in China for private equity (PE) investors to earn acceptable returns remains uncertain following the recent reopening of the initial public offering (IPO) market after a 15-month freeze. Wharton experts predict tough days ahead for PE investors in the country as price wars for attractive investment opportunities threaten to erode the outsized returns PE firms typically seek.
Initial reports, nevertheless, look favorable. The 48 IPOs listed on the Shanghai and Shenzhen exchanges in the first quarter posted record returns, averaging 54% above listing price compared to 9% for the rest of the world, according to a recent Bloomberg report.
