Yuan-denominated private equity fundraising declined for a second straight year in 2013 as consolidation continued in the domestic private equity industry, and initial public offerings were suspended in the Chinese market, according to PricewaterhouseCoopers.

Restart of IPOs

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With IPO approvals having resumed in late 2013, there will be more PE exits from investments and more new deals this year, as well as a larger amount of funds raised, PwC said in a report.

"China's PE market developed strongly in 2013 and picked up throughout the year.

"There were also breakthroughs on the regulatory front, with reforms in terms of raising funds, investment, administration and exits. These changes have made the PE market more stable," said Gao Jianbin, PwC central China private equity group leader.

The suspension of IPOs in 2013 was the major cause of the slowdown in China's PE market development.

The scale of yuan-denominated funds declined to $13 billion in 2013 from $20.3 billion in 2012.

However, during the second half of last year, when it became clear that domestic IPOs would resume, the number of new investments recovered. There were 205 transactions, up 27 percent from the first half.

The average deal size for 2013 was about $95.4 million, the highest level since 2008.

The technology, media and telecommunications and health sectors grew in importance for PE investors last year, PWC reported.