Asia-focused private equity firm PAG has secured RMB3.1bn ($432m) at the first close of its debut yuan-denominated buyout fund, surpassing its initial target, according to a report by Reuters citing unnamed sources familiar with the matter.
The milestone marks a strategic pivot for PAG toward local capital amid a prolonged downturn in China-focused cross-border fundraising.
The fund, anchored by the Suzhou municipal government and backed by several Chinese insurers, will focus on control-oriented buyouts and structured minority equity deals across sectors including consumer, healthcare, technology, and financial services.
Despite a broader slump in Chinese dealmaking – private equity-backed transactions in China dropped to just $8.1bn in H1 2025, the lowest since 2013 – PAG’s successful raise signals growing momentum among domestic LPs.
The move aligns with a broader trend of global buyout firms, such as Warburg Pincus, shifting their China strategy by tapping onshore capital in response to reduced US and European investor appetite.
PAG, which manages over $55bn in assets, has committed to expanding its onshore presence, signing a deal with Suzhou New District to establish a China headquarters earlier this year. Its local investment team, based in Beijing and Shanghai, will manage both yuan- and dollar-denominated deals.
The firm has remained active in China’s consumer real estate sector, recently leading a consortium to acquire 48 shopping malls from Dalian Wanda and previously securing a 60% stake in Wanda’s mall unit in a landmark $8.3bn transaction.
