Surge in listed companies setting up buyout funds

Last year saw a fivefold surge in the number of companies that established buyout funds in China, and already this year another 125 companies have launched funds of this kind, according to new figures published in Securities Daily.

In 2015, 365 listed companies launched their own buyout funds, compared with just 71 in the previous year.

Thirty companies have launched the funds since the start of March, with investments focused on hot sectors like healthcare, environmental protection, graphene materials, culture and sports, and advanced manufacturing investment.

The statistics also show that the fund value of 10 companies reached 1 billion yuan ($154 million), and funds created by Sichuan SCIMEE Technology and Science Co and Jiangsu Jiangnan now top 5 billion yuan in value.

In its commentary on the figures, Securities Daily said if a company chose to participate in a merger or acquisition, the possibility of failure was greater than launching buyout funds.

It also highlighted that investments in healthcare, especially, are active this year, given the development of the sector has been promoted strongly within the government's recently announced 13th Five-Year Plan (2016-20).

As a result, the capital market is already keeping a close eye on related sectors, including pharmaceuticals, e-commerce and long-distance medical treatment.

According to data from Shanghai-based Wind Information Technology Co Ltd, the financial information provider, already this year there have been 51 M&A deals announced in the healthcare and medical sectors, worth 45 billion yuan. Those included a growing number of deals with overseas companies.