When ant group finally goes public in hong kong and china in a listing that could be one of the world largest equity offerings, many longtime investors will record substantial paper profits on their shares.

The financial technology group that spun out of alibaba in 2011 is expected to be valued at $200bn-$300bn, an amount more than most global banks.

That represents a big payday for international investors such as carlyle, the canadian pension plan investment board and general atlantic that have been backers of the company that dominates mobile payments in china with 711m monthly users of its alipay app.

But some big investors may have missed out because of earlier decisions to invest in companies that alibaba regards as competitors. that in turn is a result of a practice that is widespread in china in which investors are sometimes only allowed to invest in a young tech company if they pledge not to invest in rivals or potential rivals.

The practice is ostensibly meant to prevent potential conflicts of interest and the leakage of sensitive information legitimate concerns, no doubt. but such demands of investors from young tech companies also underscore the factional nature of much of chinese business and how competition over capital is seen as a zero-sum game.

For many company promoters, it is not enough to raise boatloads of money; it is equally critical to attempt to deprive your enemy of funds. investors are increasingly forced to choose sides.

This is happening more and more, says chris sun, a managing director at kkr. tech companies give you a list of their competitors as a precondition [of taking your money]. even small companies give you that restriction.

The effectiveness of this strategy is debatable. it is delusional for these firms to think that they can prevent others from getting capital, says weijian shan, chairman and chief executive of hong kong-based pag, a private equity firm.

But the practice of seeking to block rivals persists amid great rivalry among business camps. and nowhere is that competition seen to be more intense than between alibaba and tencent, the two giants of chinese ecommerce. both companies declined to respond to requests for comment on the tensions but investors cite examples of their effects.

Consider pinduoduo, an ecommerce company that targets low-end consumers outside first- and second-tier mainland cities and gives them discounts if they form groups and pool orders. one of the fastest-growing consumer internet companies on the mainland, it now has a market capitalisation of about $87bn.

But before its listing in 2018, several investors told the financial times they had declined to invest simply because pinduoduo is part of the tencent camp, which also includes , kuaishou and vipshop. tencent is a direct investor in pdd and tencents wechat mobile platform is integral to its business model.

The investors say they were explicitly warned that if they put money into pinduoduo, they would never be allowed to invest into alibaba-aligned companies. given that ant was expected to give early backers profits when it finally listed, such threats are a powerful disincentive to write a check to pinduoduo.

To navigate such conflicts is not easy, not least because many founders in china are so flexible, constantly shifting their business models. as they do so, their backers may also shift sides as well.

For example, when sequoia capital china invested in meituan, it was basically a group-buying consumer internet company, similar to groupon. meanwhile, sequoias primary exposure to food delivery on the mainland was through its stake in , which began life in 2009 as a campus online food delivery service in shanghai.

At the time, though, was part of the tencent camp. but in 2015, as meituan increasingly gravitated to delivery, it merged with dianping with the blessing of sequoia capital and tencent becoming a direct competitor to in the process. a few months later, alibaba invested more than $1bn in and dumped its dianping shares, just as the newly combined company was engaged in a capital raising prior to its listing. sequoia then sold its shares in in 2015.

Many investors would far prefer to stay neutral in such conflicts and some of the bigger international names have enough clout to push back on demands. but hopes a few years ago that rivalries would soften over time have faded. in china, if anything, they are intensifying.