Chinese Private Markets Likely to Suffer from Slowing Entrepreneurship

Recent events in China have caused investor concerns, with many avoiding to commit new long-term investments. This article examines the viability of illiquid private investment funds in China, which have lock-up periods of 10 years or more, and explores the evolving entrepreneurship landscape and its impact on the PE/VC market, questioning whether investors should continue supporting general partners (GPs) with a history of good returns or shift focus due to current investment concerns. We anticipate that the near-term investment outlook for these sectors may fall short of recent historical performance, influenced by the current concentration of power within the Chinese government and the administration's cautious stance towards the private sector.