China’s private equity activity picks up as investors focus on tech and AI opportunities

Private equity activity in China is accelerating, with investors prioritizing opportunities in technology, including semiconductors, AI, and robotics. Analysts note that while fundraising has increased over the past 12-18 months, firms are now more selective than in previous cycles. Gary Chan, head of private equity at Sun Hung Kai & Co, observed this trend at the Asia Private Equity Leadership Summit on Wednesday. In the first three months of 2024, 37 companies raised approximately $13.26 billion on Hong Kong’s main board, according to LSEG Data and Analytics. This represents nearly a fivefold increase compared to the same period in 2023, signaling renewed investor confidence. The shift reflects a broader market correction following years of volatility, including the US-China trade war, the Covid-19 pandemic, and domestic policy adjustments. Kent Chen, head of Asia Private Equity at Neuberger Berman, highlighted emerging growth areas such as digital economies, green technology, and AI-driven automation. Limited partners, however, remain cautious, with many seeking clearer exit strategies. Alex Ying, head of Direct PE Investments at CDIB Capital International, noted that investors are increasingly focused on how private equity firms plan to monetize their holdings and return capital. Despite the cautious approach, the tech and AI sectors are leading the revival, with firms targeting high-growth industries where China’s policy shifts and global demand may create long-term opportunities.