World’s biggest PE houses struggle to exit China deals
Financial Times
February 22, 2026
AI-Generated Deep Dive Summary
The world's largest private equity firms are grappling with challenges as they seek to exit their investments in China, despite other forms of dealmaking activity resuming. The difficulties these firms face highlight a complex regulatory environment and geopolitical tensions that are impacting the ability to monetize deals. This situation underscores the ongoing uncertainties faced by foreign investors in China's market.
The inability of private equity groups to cash out on their investments contrasts with the recovery of other types of dealmaking, such as mergers and acquisitions, which have seen a resurgence. Factors contributing to this struggle include prolonged regulatory delays, increased scrutiny over national security concerns, and shifting government policies that prioritize domestic control over foreign influence. These challenges are particularly pronounced in sectors like technology and financial services, where foreign firms often face stricter regulations.
The implications of these difficulties extend beyond individual deals. The struggles of major PE houses reflect broader trends in China's economic landscape, where foreign investors are increasingly navigating a more protectionist environment. This situation raises questions about the long-term viability of foreign investment strategies in China and could prompt PE firms to adjust their approaches, focusing on strategic partnerships or patient capital investments rather than exit-driven dealmaking.
For readers interested in business, understanding these dynamics is crucial as they highlight the evolving risks and opportunities for global investors in China. The challenges faced by private equity firms also serve as a reminder of the interconnectedness between geopolitical tensions and market conditions, which can have far-reaching implications for international business operations and investment strategies.
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Originally published on Financial Times on 2/22/2026