New investments in mainland China by some of the world's largest private equity (PE) firms have fallen to zero since 2024, while capital has flowed into Japan, India, Australia and other markets. As the size of major funds targeting Asia expands, geopolitical risks and tighter regulations are driving changes in the investment environment.
New equity investments in mainland Chinese companies by 10 of the world's largest PE firms fell sharply, from 2 in 2024 to 3 in 2025, while new investments since 2024 were tallied at zero as of the period covered. The firms include Blackstone, KKR and Carlyle, and the tally covers only publicly disclosed new equity investments.
Investment capital is raised from pension funds, insurers and other investors in the private equity industry. However, economic growth in China has slowed, US interest rates have risen, and tighter regulations have made exits in mainland China, including sales and realizations, more difficult, according to the analysis.
Reports of tighter regulation by Chinese authorities in sensitive sectors, including AI, and delays in M&A transactions involving major companies have fueled the view that barriers to US investment in China are rising. At the same time, investors are increasingly watching other Asian countries, including Japan, India and Australia, as alternative investment destinations, and fundraising for existing funds has become more active.
EQT raised one of the largest-ever funds in the Asia-Pacific region, at $15.6 billion, while Blackstone closed an Asia fund at $13.1 billion. The two firms' new capital alone totaled approximately $28.7 billion. This could accelerate the flow of PE capital into Asia outside China.