Private equity firms dazzled by cultural returns

"Investment in the cultural sector, especially assessing something as abstract as performance, is at its very early stages in this country, and we want to be the first," added Xu Xiang, head of the Southwest China region at Shenzhen Capital Group Co Ltd.

In 2013, the private equity firm invested 30 million yuan in Kunming-based Yang Liping Arts & Culture Ltd, for a 30 percent stake in the business.

"As China has a large number of tourists, performance in popular tourism cities can be quite successful," said Duan Shaoxian, general manager of the Beijing branch of the Yang Liping company, adding that they are stepping up to improve marketing and cooperating with travel agencies.

Compared with indoor performances, outdoor ones can be more profitable because they can be included in the price of tickets to scenic spots, can seat more visitors and can include more daily performances, said Duan.

Duan added that a challenge for productions at seasonal tourist sites is that they may not attract many customers in the off-season.

In December 2010, Yunfeng Capital announced an investment of $50 million in Beijing-based Impression Inc, a company founded by three famous movie directors and production designers-Zhang Yimou, Wang Chaoge and Fan Yue-that is dedicated to creating, producing and managing large outdoor productions.

Its outdoor shows reflect local views and traditions in the tourism cities of Guilin, in Guangxi Zhuang autonomous region; Lijiang in Yunnan province; Hangzhou and Putuo in Zhejiang province; Haikou in Hainan province; and Wuyishan in Fujian province.

Profits from the show in Guilin between 2010 and 2012 totaled more than 234.6 million yuan, according to the National Business Daily.