Private equity activity in Greater China began showing signs of recovery in 2024, with total deal value rising 7% to $47 billion. A sharp uptick in mega deals exceeding $1 billion, along with the growing prominence of buyouts, played a pivotal role in driving this rebound. While growth deals continued to dominate by volume, buyouts captured 29% of overall deal value, marking an all-time high for the region. Buyout deal sizes increased significantly, as investors adapted to geopolitical tensions and economic uncertainty by shifting toward control-oriented strategies. Many general partners (GPs) moved away from traditional growth capital, instead targeting scalable companies with professional management teams. Furthermore, investment strategies diverged notably between USD- and RMB-denominated funds. USD-based GPs concentrated on resilient sectors such as healthcare, services, and retail. In contrast, RMB funds aligned with government priorities, channeling capital into semiconductors, electric vehicles, and other strategic sectors.
Additionally, government-affiliated investors doubled their activity, while global GPs contributed only 6% of total deal value. Domestic GPs maintained stable RMB fund activity, though their USD participation declined. Exits remained constrained by a weak IPO market. Moreover, limited exit options and uneven returns increased pressure on investors. Fundraising became highly concentrated, with the top 10 GPs capturing nearly 70% of total capital, up from 30% four years ago, due to their strong operational expertise and performance history. GPs also pursued bolt-on and cross-border acquisitions to strengthen supply chains and drive synergies. Domestic firms increasingly acquired global assets to accelerate local growth, supported by favorable policy trends and market consolidation. For CFOs, this developing environment highlights the need to reassess portfolio resilience. Aligning capital allocation with shifting investment theses and maintaining strategic agility will be essential for long-term value creation.
