Major private equity firms including KKR, Blackstone, and CVC Capital Partners recorded no publicly disclosed full exits from mainland Chinese portfolio companies in 2025, according to a report by the Financial Times citing data from PitchBook and Dealogic.
The dearth of divestments highlights persistent liquidity issues in the world’s second-largest economy, as PE firms face challenges in returning capital to investors, amid higher interest rates and subdued valuations which are constraining deal activity.
“There’s huge pressure on exits globally, and the China teams are under pressure to contribute to that return of capital, so there is a backlog,” said Matthew Phillips, PwC’s mainland China and Hong Kong financial services leader.
Warburg Pincus has achieved partial, non-public sales of Chinese assets, but full divestments remain rare. Valuations have been under pressure due to weaker demand, slower economic growth, and fewer Western investors, with secondary sales of Chinese funds trading at 40–50% discounts — far higher than North American or European levels.
Despite these challenges, several large buyout firms continue to raise pan-Asian funds. EQT expects to close its latest Asia-focused fund at $14.5bn in 2026, while others are targeting Japan and India, where regulatory reforms and currency conditions offer attractive opportunities.
There are signs of potential recovery in China’s private capital market. Bain Capital completed the sale of its China data centre business Chindata at $4bn in January, marking the first major buyout exit by a global PE house in China in at least two years. Meanwhile, venture capital-style IPO exits, including Carlyle’s stake in autonomous driving firm WeRide and EQT’s divestment from JD Industrials, have allowed smaller, selective monetisations through the Hong Kong stock exchange.
Nevertheless, some remain cautious about relying on public markets for larger buyout exits. Stephanie Hui, Goldman Sachs’ head of private equity in Asia, said: “For buyout deals, the capital market is not the best way to exit in China. Strategic sales or transfers to other sponsors often provide a more efficient route for monetising larger investments.”
