China remains the single largest market for PE investors, as well as the most attractive.

Temasek Holdings, Singapore's State investment company, has about 23 percent of its portfolio in China deals.

But a long suspension of initial public offerings made it impossible for funds to exit out of their China investments.

Overseas yuan gets nod in mainland PE market

The ban on new A-shares (shares in companies on Chinese stock markets and denominated in yuan) was only recently lifted. But Li from the China-ASEAN Investment Cooperation Fund says it is hard to predict whether investors are ready to part with their cash in China.

"Chinese PE is shifting its focus from the domestic market to the international market. This is part of the bigger trend of Chinese companies going out."

Limited partners (LPs) of the actual fund, as opposed to those who invest in the funds, take a very small proportion of the international market.

"Although they are growing very fast, there is still a lack of mature LPs. There is no mature LP culture," says Li.

However, change is underway. Last May, financier Fang Fenglei, chairman of Hopu Investment Management, started raising more than $2 billion for the Hopu Master Fund II, to invest in China and abroad.

As they expand internationally, Chinese funds have to compete with established international partners.

KKR, for example, is one of the most committed to the region. The company has made other investments, including small deals in Indonesia.

Haier wants to expand internationally to build on its position as a leading white goods maker by sales, but its market share is still in single digits. KKR has the know-how and, hopefully, the connections, to make that happen.

"We believe KKR's sufficient capital and rich experience in international mergers and acquisitions will accelerate the integration of Haier's white electric platform," said Tan Lixia, the company's vice-chairman.

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