State-backed shadow funds in China are helping drive corporate valuations in the region into “nosebleed territory,” according to a new report. The class of investors – with names such as China Life Insurance and China Development Bank Capital – have become some of the most powerful private equity investors in the region over the past two years and have come armed with deep, captive funds that prove difficult for industry watchers to track, the Financial Times reports. Suvir Varma, the head of Bain & Co’s Asia Pacific private equity and sovereign wealth fund practice, said: “It’s what I call corporate shadow capital. It’s these state-linked corporates in China or insurance companies that have very deep balance sheets and long-term asset-liability needs. Start-ups in Asia over the past two years have been hit by a $30bn wall of capital, the vast majority of which has come from China.