CHINA Law and Practice Contributed by: Alan Du and Yiwei Shi, King & Wood Mallesons
1. Market Overview 1.1 State of the Market
CNY4.14 trillion. This was higher than in 2023 (an increase of only CNY0.13 trillion), in 2022 (an increase of only CNY0.67 trillion) and in 2021 (an increase of CNY3.81 trillion). However, the number and the size of private securities invest - ment funds slightly decreased in 2024. From January 2024 to October 2024, the number of private securities investment funds decreased from 97,571 to 90,853. At the same time, pri - vate securities investment funds decreased from CNY5.52 trillion to CNY5.25 trillion – a decrease of CNY0.27 trillion. There was also a small decline in the private equity funds industry. From January 2024 to October 2024, the number of private equity funds decreased from 55,409 to 55,259. At the same time, private equity funds decreased from CNY14.32 trillion to CNY14.27 trillion – a decrease of CNY0.05 trillion. Further, fundraising has become increasingly challenging for fund managers, and the polarised situation of the fundraising market has become more pronounced. Regrettably, even top-tier private equity fund managers have slowed their fundraising pace compared to 2023. State- owned capital is increasingly becoming a sig - nificant contributor to private equity funds, and investors with SOE backgrounds have become a main force in the private equity investment mar - ket. Both the number and size of new funds in the first three quarters of 2024 decreased sig - nificantly compared to the same period the pre - vious year. By September 2024, the number of new private funds was 7,787, while in 2023, the number was 20,056. At the same time, the size of new private funds was CNY282.8 billion, while in 2023 the size was CNY538.8 billion.
In the People’s Republic of China (PRC), invest - ment funds are generally divided into two cat - egories: public funds and private funds. Public Funds Subject to approval by the China Securities Regulatory Commission (CSRC), public funds may be marketed through public means (such as public media) towards the general public, including those who are not Qualified Investors (as further explained in 2.2.3 Restrictions on Investors ). Public funds may be considered the Chinese equivalent of retail funds. According to the latest statistics published by the Asset Management Association of China (AMAC), as of 31 October 2024, the assets under management of 12,212 public funds reached CNY31.50 trillion. Private Funds Private funds can only be marketed to Qualified Investors by way of a private placement. Private funds may be considered the Chinese equiva - lent of wholesale funds or alternative investment funds. According to the AMAC, as of 31 October 2024 there were 20,411 private fund managers reg - istered with it, and the assets under manage - ment of 147,037 private funds that filed with the AMAC stood at CNY19.93 trillion. Funds Market in 2024 The growth of public funds has exceeded that of the previous two years, and has returned to the level of 2021. From January 2024 to Octo - ber 2024, public funds increased from CNY27.36 trillion to CNY31.50 trillion – an increase of
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