Han Kun Releases 2020 Fund Practice Data Analysis Report

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Private equity industry recovered in the second half of the year, saw remarkable growth in healthcare and online office areas.

Han Kun Law Offices has released its Han Kun 2020 Fund Practice Data Analysis Report (the “Report”). The online version of the Report is available on the firm’s website (https://www.hankunlaw.com/downloadfile/newsAndInsights/f6d7d865b4318ff17ae5b4d5d8812206.pdf).

In 2020, despite the severe challenges posed by COVID-19, Han Kun was counsel to over a hundred fundraising projects in 2020, owing to the trust of our clients and our strong position in this practice area. These projects included both onshore and offshore fund structures involving in the aggregate RMB 300 billion. Han Kun developed the Report by rigorously comparing and analyzing the relevant data from the private fund projects in which Han Kun participated in 2020, aiming to provide a multi-dimensional view of the private equity fund industry in the previous year and offer references to market participants.

The Report provides a panoramic view of characteristics of the private equity fund industry in 2020 and summarizes industry development trends by making year-over-year comparisons.

Fund Investment Destinations Deeply Influenced by COVID-19

Biomedicine was a standout destination for private equity investment, smart hardware (artificial intelligence and augmented reality) and TMT kept their popularity, and entertainment, culture, and catering rounded out the top.

Offshore Funds Rapidly Catching Up

The number of offshore funds consummated in 2020 was neck and neck with onshore funds, which was a remarkable turnaround because in 2019 onshore funds outnumbered their offshore counterparts by a factor of two to one. This turnaround correlates directly with China’s gradual tightening of control over the flow of funds to the asset management industry in the past few years, which has pushed fund managers to expand and diversify their fundraising sources.

Funds Tend to “Live” Longer

Our 2020 data show that the term of private equity funds became longer, and more GPs were entitled to extend fund terms at their sole discretion. This may be because, on the one side, funds focused on the healthcare sector tend to have longer terms than those focused on other industries; on the other side, a lack of exit approaches has continued to push GPs to extend fund terms.

Since 2016, Han Kun, as a firm that has long been active at the forefront of the onshore and offshore private equity funds industry, has organized the formulation of the Comments on Hot Issues in Supervision and Practice of Private Equity Funds in China (authors include lawyers from our investment funds and asset management practices). The firm has witnessed the development of the Chinese private equity fund industry, and has always been committed to promoting the sustainable development of the industry. We hope that the Report, like its predecessors, will offer useful references to the development of China’s private equity market and contribute to its healthy development.


About Han Kun Law Offices

Han Kun is a full-service law firm in China and a leader in many important practice areas including private equity, mergers and acquisitions, international and domestic capital markets, investment funds/asset management, antitrust/competition, banking and finance, aviation finance, foreign direct investment, compliance, private client/wealth management, intellectual property, and dispute resolution. Han Kun has been consistently recognized by the industry as a leading Chinese law firm in the Asia-Pacific region.

For more details, please visit our official website: https://www.hankunlaw.com/index.html

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