Asia's private equity market offering investment grade opportunities to institutional investors. China to lead the region in experience, capital raised and investment activity.

Beijing, August 25, 2009 – Adveq, a leading independent private equity fund of funds investment manager with offices in Beijing, New York, Frankfurt and Zurich, today presented its market outlook for the private equity industry in China.

Over the past five years, the private equity market in Asia has experienced a period of significant growth. Asia now accounts for around one-third of the global private equity industry by funds invested and is equal in size to the US and European markets.

During the same five year period, China has confirmed its leading position in the Asian private equity market, increasing its share from 8% in 2005 to 29% in 2008, and is showing signs that this will increase further in 2009 to around one third of the total market in Asia. China’s share of capital invested in Asia has also gradually increased since 2007. In the first half of 2009, China represented one third (USD 7.3 billion) of the total funds invested into private equity in Asia and that trend is set to continue.

There are now approximately 1,000 private equity fund managers in Asia-Pacific. Of those, around 300 are in China and the industry has now reached a level of experience and professionalism where more than 100 of those managers are considered to be institutional investment grade. Adveq predicts that, in the aftermath of the global financial crisis, the Asian private equity market will continue to develop and mature, driven by increased specialization and industry segmentation. China is expected to lead this transition, further consolidating its share of the Asian private equity market to head the region both in terms of capital raised and invested.

The rapid growth of the Chinese private equity market has attracted the attention of institutional investors globally. For the first time in the history of private equity, investors now have a viable alternative, in terms of regional diversification, to their value investments in Europe or venture capital and distressed/turnaround investments in North America.

At the same time as Asia, and China in particular, expands its influence in the global private equity market, Adveq predicts that the Western private equity infrastructure will shrink by around 30% over the next few years. Only those private equity firms that are clearly differentiated, competitively positioned and are able to provide added value to their investors beyond financial returns, will be considered by institutional investors in the future.

Bruno Raschle, Chairman and CEO of Adveq, commented: “Only over the past ten years has the Asian private equity market emerged as an investment grade asset class. We believe that 2010 will mark a step-change for the private equity industry and, for the first time, institutional investors will have a true choice of where to invest in private equity on a global basis. China is expected to continue to lead the development of the Asian private equity market and we believe that the rise of the domestic private equity market in China, combined with an increasingly favorable regulatory environment, will continue to encourage foreign institutional investment into China.” He added “In light of China’s growing importance, Adveq (Beijing) will remain the centre for our future investment activities in Asia.”

Darren Wong, Managing Director and Head of Adveq’s Asian investment programs, said: “Many of the products and business strategies being developed in China address buying markets that are in order of magnitude larger than in Europe or North America, providing entrepreneurs, fund managers and investors with a more favorable risk/return profile than anywhere in the world. The universe of premier Chinese fund managers is now large enough to enable institutional investors to build a portfolio of high quality private equity fund investments in China with the potential to deliver long term returns.”

Adveq was one of the first active fund of funds managers investing in China and has been supporting high-growth, private equity backed companies through private equity fund investments in the region since 1998. Since then, Adveq has committed to 20 private equity funds in China. Adveq has been active in advising and guiding several private equity managers either as a launch or cornerstone investor or through active participation on advisory boards.

About Adveq
Adveq is a leading independent private equity fund of funds investment manager with a global investment scope and offices in Beijing, New York, Frankfurt and Zurich. Founded in 1997, Adveq currently manages approximately USD 4 billion of assets on behalf of its clients. These clients consist almost entirely of international institutional investors including pension funds, insurance companies, family offices and other financial services providers, that are located primarily in Europe, Asia, Australia and the United States.

Further information
Marlene Caduff
Corporate Communications
Adveq Management AG
Affolternstrasse 56
CH-8050 Zurich
Phone: +41 (0)43 288 32 00
E-Mail: marlene.caduff(at)adveq.com
www.adveq.com