Chongqing - The 24th China Venture Capital & Private Equity Annual Forum concluded in Southwest China's Chongqing municipality on December 11.

The Zero2IPO Research presented the China Venture Capital & Private Equity Annual Ranking for 2024 during the event. CASSTAR was named the best early-stage investment institution, Hong Shan was recognized as the best venture capital (VC) institution, and Hillhouse Investment was honored as the best private equity institution in China for 2024.

The 24th China Venture Capital & Private Equity Annual Forum is held in Chongqing from December 10 to 11. (Photo/Yufu Holding)

At the opening ceremony, Ni Zhengdong, founder and chairman of Zero2IPO Group and CEO of Zero2IPO Venture, delivered a speech and released the 2024 China Equity Investment Development Report. 

The report shows that in the first three quarters of 2024, China registered 80 new fund managers, deregistered 800, filed over 3,000 new funds, and canceled more than 1,800. These changes indicate that China's equity investment industry is undergoing a phase of adjustment, signaling a shift toward higher-quality development.

2024 is a year of transition for China's equity investment market, with the primary market receiving unprecedented attention. This June, the State Council released a slew of new policies and measures to promote venture capital, and the "Opinions on Deepening Market Reform of Mergers, Acquisitions, and Restructurings of Listed Companies" have revitalized the industry.

Measures include directing long-term capital, such as insurance funds, into venture capital while expanding exit options and optimizing exit policies. Additionally, China opens up cross-industry M&A opportunities, relaxes criteria for acquiring unprofitable assets, and encourages private equity and venture capital participation, including "A-to-A" mergers where listed companies merge with other listed firms.

Li Liang, founding partner of Hillhouse Investment, described venture capital as a crystal ball that reflects the future through the past. He emphasized that the key to the investment industry's long-term sustainability is discovering, supporting, and nurturing exceptional entrepreneurs while fostering continuous innovation.

In a volatile macroeconomic climate, "patient capital" is gaining traction, with state-owned and industrial capital advancing. Emerging sectors like AI and semiconductors drive hard-tech investment trends while the M&A market reaches a turning point, prompting equity firms to explore diverse exit strategies. Government, state, and investment institutions are united in their efforts to find new sources of economic growth.

In response to industry changes, Cao Yonggang, president of Hony Capital, urged a break from the old era. He emphasized the need to rebuild consensus on capital rules, management practices, and asset valuation to ensure the investment sector's stable and sustainable growth.

Looking ahead to 2025, Jiao Teng, partner at Future Capital Discovery Fund, outlined three key strategies: maintain a long-term view, focus on top players in emerging opportunities, and anticipate hard tech, especially AI, to dominate investment over the next 5 to 10 years.

Li Wei, founding partner of Green Pine Capital Partners, believes that increasing investment in hard science and technology and promoting better industry knowledge are essential to overcoming challenges in the current global competition.

Regarding the "difficult exit" challenge for equity investors, Gong Puling, founder and chairman of Tangxing Capital, shared that M&A or alternate rounds of transfers are key exit strategies, and listing in Hong Kong has become a viable option. She also encouraged companies unable to list domestically to explore overseas markets. With A-share IPOs slowing, M&A exits are increasingly important.

Wayne Wang, managing director of DCP Capital, expressed optimism about the M&A market's future, citing rapid growth in fund size, product specialization, and practitioner professionalism, signaling a promising outlook for M&A investments.