Private Equity

China's private equity (PE) market has experienced explosive growth over the past decade, fuelled by the opening of its capital markets and a more favourable regulatory environment. PE funds have become an important source of capital, driving innovation, fostering business growth, and optimising industrial structure. This growth has been further accelerated by the influx of international PE funds, the emergence of domestic PE funds, and the establishment of government-backed industry development funds, leading China's PE market has embraced both diversification and specialisation.

However, China's PE market also faces significant challenges. Competition is intensifying as the most sought-after investment opportunities become increasingly scarce. Portfolio companies require better support for growth, and capital exit strategies face greater uncertainties. The PE industry must address these challenges to ensure continued success.

In this context, PE funds urgently need professional institutions with dedicated PE service experience and a deep understanding of both domestic and overseas capital markets to provide one-stop and holistic solutions. KPMG offers a comprehensive suite of services tailored to the specific needs of PE clients. Our dedicated team, comprised of senior partners from audit, tax, and advisory service lines, provides one-stop, holistic solutions across all stages of a fund's lifecycle, including fund raising and establishment, fund structure design, fund audit, transaction initiation, due diligence, post-deal integration, and investment exit.

To learn more how KPMG can help private equity funds and their portfolio companies achieve success, please feel free to contact us.

Services in details

Fund raising	Tax structuring for fund establishment and exit	Provides tax structuring advisory before the establishment of PE funds to help maximise benefits via tax savings upon the liquidation of PE funds at the exit stage. The KPMG Tax team will continuously provide tax advisory services throughout the PE funds’ life cycle
	LP due diligence	Provides due diligence for the capital (LP) to select fund managers (GP)
	Fund audit	Audits the financial statements of PE funds and discloses funds' accurate financial information to fund investors
	Valuation	Provides regular valuation on funds (including its portfolios) in accordance with regulatory requirements. Valuation services also run through the whole investment process of each invested project (pre-deal, post-deal, continuous tracking, and exit)
Investment	Transaction initiation and execution	KPMG’s Strategy and M&A teams help PE funds screen and evaluate investment objects. They also provide whole-process deal management, including but not limited to: process control, communication with the seller, coordination of various due diligence teams, negotiation support and transaction document assistance, responding to regulatory requirements etc.
	Due diligence	Our due diligence team has extensive industry experience in assisting PE funds to complete deals. Due diligence includes, but is not limited to: financial, tax, commercial, operational, ESG, HR etc.
	Tax structuring	Provides suggestions on deal structures and considers issues before and during the deal process as well as in the exit stage
Post-deal management	Portfolio management	Portfolio management covers six aspects: establishment and management of the fund's internal portfolio management team; management of dynamic portfolio monitoring; management of portfolio performance evaluation; decision-making management; empowerment and value-added management; and exit management
	Risk management and internal control	Provides portfolio companies with a comprehensive risk management framework, system and process optimisation, sorting of internal control SOP (standard operation procedures), and strengthening of corporate governance, to lay a solid foundation for the sustainable and healthy development of portfolio companies
	Tax Compliance	Sorts the tax practices of portfolio companies, provide compliance suggestion and help to implement best practice for tax compliance
	Strategy and operation consulting	KPMG’s Management Consulting team would share with the portfolio companies the experiences and best practices in strategy and operation, including strategic positioning and implementation, operation improvement, financial process optimisation etc., to empower portfolio companies
	Optimisation of financial management	Assists portfolio companies to optimise their financial reporting process and financial and management reports, to facilitate PE funds to timely identify and solve problems in portfolio companies
	IT system optimisation and digitalisation	Integrates and optimises portfolio companies’ IT systems (including ERP system, financial system, etc.) based on a deep understanding of portfolio companies’ business, finance, and daily management; empowers portfolio companies via digitalisation; and improves management efficiency and financial reporting quality to promote business growth
	IPO assistance	The IPO of a portfolio company is a core channel of PE exit. KPMG is well versed in domestic and international capital markets and can assist portfolio companies to select the most favourable listing location, help them improve financial reporting quality to meet regulatory requirements, and provide holistic services in listing preparation during and after the listing
Value realisation	Capital exit service	Assist PE funds to choose the exit channel and opportunity (e.g. exit via listing or selling shares to other investors). KPMG’s Corporate Finance team also assists PE funds to find potential investors
	Vendor assistance/ Vendor due diligence	The vendor assistance service streamlines the preparation of portfolio companies for sale by organising their business and financial information. Vendor due diligence (VDD) conducts comprehensive due diligence reports , covering finance, tax, operations, and other relevant areas, producing market-recognised reports. These VDD reports highlight the portfolio company's strengths and value propositions, enhancing its attractiveness to potential buyers. The Vendor assistance and Vendor due diligence services also help PE funds face many potential investors concurrently, reducing interference to daily operations of the PE fund and the portfolio company.
	IPO audit	KPMG has a distinguished reputation as a Big Four accounting firm. A KPMG audit helps portfolio companies gain recognition in global capital markets.