One of China’s Top Tech Investors Sees Crackdown Turning Point

The founder of one of China’s biggest private equity investors said the nation’s tech firms are turning. A corner after a recent rout wiped out nearly $2 trillion in market value at its peak. 

Fred Hu, the former Goldman Sachs Group Inc. rainmaker who started the $17 billion. Chinese private equity firm Primavera Capital, said reassuring messages concerning regulation. Resilient earnings and beaten-down valuations now make the sector interesting for investors.

Mogul’s View

The private equity mogul’s views are one of the strongest statements yet in support. A turnaround as global investors begin to rotate back into tech stocks. The Chinese Communist Party’s yearlong crackdown is showing signs of softening at the edges. Even as industry insiders point to a more downbeat picture.

Founded in 2010, Primavera is ranked as the fourth biggest private equity firm in China according to Private Equity International. Previous investments include fast-food chain operator Yum China Holdings Inc., electric-vehicle maker XPeng Inc. And e-commerce giant Alibaba Group Holding Ltd., according to the firm’s website. 

Hu joins banks including JPMorgan Asset Management and Goldman Sachs that are betting. A recovery for the nation’s homegrown tech giants while the People’s Bank of China’s pledge to keep monetary policy supportive has attracted buyers to the stocks.

Reports on the wrapping up of a regulatory probe into Didi Global Inc. and steps toward. A potential revival of Ant Group Co.’s listing have added to more optimistic sentiment. A gauge of Chinese tech stocks has surged 11% this month, poised for the most in nearly two years. 

The financier has maintained a broadly positive outlook for tech firms even as others abandoned. The sector, in March calling a selloff in Chinese stocks “excessive” and saying Alibaba offers “deep value”. Primavera filed to list one of the first special purpose acquisition companies in Hong Kong earlier. This year to target high-growth sectors in Greater China. 

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