As we enter 2025, the A-share market in China is undergoing significant fluctuations, bringing about a transformative period for the private equity sectorParticularly, the large-scale private equity firms stirring the waters with assets exceeding billions are facing a substantial "test," resulting in an accelerated reshuffle within the industryRecent data reveals that by January 31, the number of billion-yuan private equity firms has dwindled to 80, a decrease of nine compared to the previous year-endNotable exits include firms such as Shanghai Baoyin and Fansong Asset Management, while Hainan Turing has impressively surged, marking its entrance into this exclusive circle.

January has seen heightened scrutiny towards the performance of these billion-yuan firmsAmong the 379 private equity products that disclosed their performance, the average return for January was a disappointing -0.97%, with less than 40% of these products yielding positive returnsHowever, as market conditions show signs of recovery, enthusiasm for new product registrations is noticeably increasing, with over 700 private securities products filed for approval in two consecutive months.

The inception of 2025 has spotlighted the structural trends in the A-share market, particularly in the wake of DeepSeek's emergenceAI concept stocks are in high demand, creating a fervor for the technology sectorAlthough adjustments are ongoing in most sectors, we can observe a clear segmentation within the private equity realm, especially among those focused on secondary market investmentsEven the industry's front-runners, the billion-yuan private equity firms, have experienced this reshuffle.

By February 12, the latest statistics confirmed the continuing trend, noting a dwindling number of billion-yuan private equity firmsFirms such as Shanghai Baoyin, Fansong Asset, Ge Finubo, Yuanshin Investment, and several others have temporarily exited this elite bracket, with the emergence of Hainan Turing as a notable newcomer

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This shift is significant; out of the 80 billion-yuan private equity firms remaining, 32 are quant funds, while 40 are focused on discretionary trading strategiesFurthermore, seven firms are blended strategy funds.

A standout performer amidst this turmoil is Hainan Turing, which gained its license in early 2021 and has rapidly expanded its management scale to over 20 billion yuan within just over a year, with 90% of its investment coming from institutional playersBy July the previous year, the fund had soared to 70 billion yuan, showcasing significant growth potentialThe founder and chief investment director, Wang Yamin, a UCL graduate in financial mathematics, has an impressive background, having worked with GMEX Group, Morgan Stanley, and Credit Suisse before establishing Turing Fund.

In contrast, Bansha Investment has drawn scrutiny, temporarily stepping back from the billion-yuan league after investors reported a loss of 15% over three years, raising concerns about its long-term viability.

Analyzing the performance reports for January reveals an underwhelming picture, with less than 40% of billion-yuan private equity products achieving positive returnsDiscretionary billion-yuan private equity firms appear to be particularly vulnerable, with many of their products recording lossesOf the 379 products with available performance data, the average return hovered around -0.97%. Dissecting the numbers further shows that discretionary funds averaged a return of -2.00%, with only 12.74% managing a positive outcome.

On a relatively brighter note, the quant-focused funds fared better with an average of -0.09%, and nearly 48% of their products reported gainsFor instance, some high performers among these quant firms included Hei Yi Asset and Bo Run Yintai InvestmentThe hybrid funds, although limited in numbers, also exhibited varying degrees of performance.

Market optimism appears to be rekindling, demonstrated by an increase in registrations for new private equity products

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