After years of caution, global private equity firms, including EQT, PAG, and Warburg Pincus, are reconsidering China, lured by lower valuations, reduced competition, and investor fatigue with US assets, according to a report by Bloomberg.
Speaking at the Global Financial Leaders’ Investment Summit in Hong Kong, senior executives from the three firms signalled a potential shift in sentiment toward Chinese markets once deemed too risky.
After a difficult stretch marked by regulatory crackdowns, slowing growth, and geopolitical strain, private equity interest in China appears to be stirring again. “We like China — valuations are cheap, debt is cheap, and there’s almost zero competition,” said Chris Gradel, co-founder and CEO of PAG. “There are some great companies available at very compelling prices.”
Jeffrey Perlman, CEO of Warburg Pincus, agreed that the reset in valuations has opened the door for renewed investment. “The challenge for the previous few years was that valuations hadn’t reset. Now they’ve adjusted, it’s getting quite attractive,” he said.
Deal data supports this sentiment. Private equity-backed investments targeting Chinese companies have already reached $25bn in 2025, surpassing last year’s total and on pace for the highest level since 2021, according to Dealogic. A notable recent example includes Boyu Capital’s purchase of a controlling stake in Starbucks China, a transaction that drew interest from more than 20 global and regional funds.
The shift comes as global investors trim exposure to the United States following years of outsized performance. Perlman said the change represents a 5%–7% reallocation — a small shift in percentage terms but potentially a large pool of capital in absolute terms. “The capital coming out of the US may well find its way to Asia,” he added.
