After years of caution, global private equity funds are quietly pivoting back to China — drawn by cheap valuations, low debt costs, and shrinking competition.
At the Global Financial Leaders’ Summit in Hong Kong, top fund executives signaled a major rebalancing:
“Investors, particularly non-U.S. ones, feel overallocated to dollar assets,”
said Jean Eric Salata, Chairman of EQT Asia.
“Asia — and especially Hong Kong and China — will be one of the big beneficiaries.”
💸 China: From Risk to Opportunity
After years of exits and regulatory headwinds, private equity sentiment is shifting:
- Chris Gradel, CEO of PAG, called China’s market “cheap, low-debt, and under-competitive.”
- Jeffrey Perlman, CEO of Warburg Pincus, added: “Valuations have finally reset — it’s getting quite attractive.”
Private equity deals in China have already hit $25B in 2025, the highest since 2021 (Dealogic).
Notably, Boyu Capital’s acquisition of Starbucks China drew interest from more than 20 global and regional funds — signaling confidence returning to the mainland.
🔁 The Global Rebalance
As investors trim U.S. exposure amid trade friction and high valuations, 5–7% of institutional allocations are being redirected — much of it toward Asia.
“Capital leaving the U.S. will end up coming to Asia,”
said Perlman.
🔹 The Takeaway
The next private equity cycle may be defined not by where risk is lower —
but where value and conviction realign.
With Western markets crowded and expensive, Asia’s resurgence — led by China’s reset — could mark the next frontier for global capital rotation.