Private equity's China conundrum: no way out in 2024

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For the first time in a decade, the world's top 10 private equity firms have failed to complete a single exit from their Chinese investments through IPOs or M&A deals in 2024. This unprecedented situation has left billions in foreign investors' capital effectively trapped in the country, challenging the traditional private equity model of selling or listing companies within three to five years.

The numbers paint a stark picture: while these firms invested $137 billion over the past decade, total exits amount to just $38 billion. New investments have plummeted to $5 billion since early 2022, reflecting growing wariness about China's investment landscape. Beijing's crackdown on IPOs since 2021 and broader economic challenges have severely limited exit options.