ShawKwei & Partners, one of Hong Kong’s oldest private equity firms, which relocated its base to Singapore three years ago, is deliberately avoiding investments in China despite a growing bullish sentiment around the world’s second-largest economy, according to a report by Bloomberg.
Founder Kyle Shaw cites Beijing’s increasing preference for state-backed enterprises, a volatile political environment, and the ongoing US-China decoupling as key factors rendering Chinese private equity “effectively uninvestable.”
ShawKwei built its reputation during China’s manufacturing boom of the late 1990s but now finds itself at odds with Beijing’s recent overtures to private entrepreneurs and foreign investors. Instead, from its Singapore headquarters, the firm has aggressively expanded into the US and Southeast Asia, with plans to scale further in the Middle East – markets Shaw views as more pragmatic and open to foreign ownership.
The broader PE industry has similarly recalibrated its China exposure. Industry giants including KKR, Carlyle Group, and Blackstone have either paused or scaled back deal activity in the country. According to Bain & Company, large PE firms accounted for just 6% of China deal value last year, down sharply from an average 24% between 2018 and 2023, while government-affiliated investors doubled their activity during that period.
Despite China’s CSI 300 index climbing about 2% this year – outperforming only Japan’s Nikkei – and Hong Kong’s Hang Seng rallying more than 20% partly due to mainland inflows, foreign investors remain cautious.
Yet the allure of China has not completely faded. An Invesco Asset Management survey of sovereign wealth funds and central banks in early 2025 found that 60% now regard China as a high or moderate allocation priority over the next five years, up from 44% the previous year, boosted by emerging tech firms like DeepSeek.
Since 2020, ShawKwei has deployed capital in seven companies across the US, Southeast Asia, Hong Kong, and Australia, spanning sectors including energy, beauty and wellness, precision manufacturing, and advanced battery materials. The firm currently manages around $1bn in assets.
Its flagship investment is a $350m commitment across Singapore and the US in three companies merged into Liberty Energy Solutions. The group, which specialises in maintenance and construction services for oil and gas refineries and petrochemical plants operated by global majors, has delivered 30% annual revenue growth and aims to double pre-tax profits to $100m within three years.
