People walk outside the headquarter building of China Life insurance in Beijing. Photo: Retuers/Jason Lee

Shadow capital, or undisclosed funds coming largely from sovereign wealth funds and insurers, has seen a sharp rise in China over the past few years, often coming from state-owned enterprises or directly from state regulators or ministries, the Financial Times reports. The investors, such as China Life Insurance and China Development Bank, act like private equity firms, but do not raise funds from typical investors or disclose how much money they are working with. According to a recent report from Bain, multiples for private equity deals in Asia grew to 17 times enterprise value to earnings before interest, tax, depreciation and amortization, versus an average of about 10 times in the US. David Brown, head of transaction services for China at PwC says that growth of this type of investment is unprecedented in scale and will affect M&A activity around the globe.