China private equity activity picks up as investors focus on tech, AI prospects

Private equity activity is picking up in China, with limited partners growing more selective about opportunities in technology, including chips, manufacturing, artificial intelligence and robotics, according to industry players. “In the last 12 to 18 months … we are seeing a lot more [private equity fundraising activities], but I would say it’s very selective” compared with the previous cycle, said Gary Chan, head of private equity of Sun Hung Kai & Co, at a panel discussion at the Asia Private Equity Leadership Summit on Wednesday. A total of 37 companies raised about US$13.26 billion on the Hong Kong stock exchange’s main board in the three months ended March 31, according to data released on Tuesday by LSEG Data and Analytics. It marks a near-fivefold jump year on year compared with the same period in 2025. The renewed interest comes as valuations across both China’s public and private markets have reset from their peaks following a turbulent period marked by the US-China trade war, the Covid-19 pandemic and a series of domestic policy reboots, according to Kent Chen, head of Asia Private Equity at Neuberger Berman. “From a valuation point of view, this is still an attractive moment,” Chen said, adding that China’s tech sector was at an inflection point, where new growth drivers were emerging, from the digital and green economies to advanced manufacturing and AI-powered robotics. Alex Ying, head of Direct PE Investments at CDIB Capital International, said that “people would like to see a bit more exits”, a sentiment widely shared by many limited partners. ‘Exit’ refers to how private equity firms plan to cash out of their investment and return capital and profits to limited partners. However, liquidity concerns remain. “We had a very good year for Hong Kong IPOs [initial public offerings], but a ‘good’ year still only meant about 119 listings in 2025,” said Chen. “Today the IPO backlog in Hong Kong is roughly 480 to 500 deals, so at this pace it would take at least four to five years to clear,” which would be a very long time for general partners, who need liquidity for their limited partners. Earlier this year, Beijing adopted a stricter approach towards companies seeking listings via offshore incorporated vehicles, a move that industry players said could slow down Hong Kong’s IPO pipeline. In the longer term however, the structural case for China remains intact for investors, according to Jacqueline Zhang, a partner at HOPU Investments. “If you look at the core ingredients of successful investing – supply-chain security, the ability to scale businesses very fast, to mobilise advanced manufacturing and labour on a massive scale, and to innovate and go global – China still looks very compelling”, Zhang said. Total exit value rose to around US$53 billion in 2025 in Greater China, up from US$46 billion in 2024, driven by secondary deals and IPOs, according to an April report from Bain & Company. The report said technology, media and telecoms continued to be the biggest target sector for Asia-Pacific private equity in 2025.