SHANGHAI—April 21, 2026—Greater China’s private equity (PE) market continued to recover in 2025, with deal volume and value increasing for a second consecutive year and exits reaching its highest level since 2022, according to Bain & Company’s 2026 Greater China Private Equity Report.

China’s PE market remains performance-driven. Capital is concentrating in higher-quality assets, and investors are applying greater discipline in how they source, underwrite and manage investments.

“Recovery is underway, but it is uneven and highly selective,” said Hao Zhou, head of Bain’s Greater China PE practice. “We are seeing capital flow to a narrower set of opportunities, particularly where investors have clear conviction on sector themes and the ability to actively drive outcomes post-investment.”

Deal activity remained stable but selective. Both deal volume and value increased for a second consecutive year, with growth investments accounting for around 55% of total deal value. Buyout activity continued to rise in both value and volume, reflecting a sustained shift toward control deals as investors seek more predictable cash flows and greater influence over performance.

Fundraising remained difficult and performance-driven. Greater China–focused USD-denominated fundraising stayed low, while RMB-denominated funds continued to grow and became the dominant source of new capital. At the same time, fundraising became more concentrated among top-performing managers, with leading firms capturing a growing share of total capital raised.

Exit activity rebounded in 2025, reaching its highest point since 2022. Total exit value rose to approximately $53 billion, up from about $17 billion in 2023 and $46 billion in 2024. Secondary transactions drove activity early in the year, while IPOs gained momentum from the second quarter onward.

Multiples experienced a slight increase as capital concentrated in sectors such as semiconductors, advanced technology and pharmaceuticals.

Investor behavior continued to evolve. Limited partners (LPs) became more actively involved, backing an increasing number of mega-deals and refining global exposure. At the same time, domestic GPs continued to allocate approximately 20–30% of capital internationally, leveraging access to the China market, supply chain advantages and portfolio connections.

As the market evolves, the requirements for success are becoming more demanding. Deal making must be more thesis-driven and more proprietary, with a focus on complex opportunities such as founder-led buyouts, carve-outs and cross-border control transactions. At current entry multiples and leverage levels, achieving target returns requires significantly stronger earnings growth than in the past – what many investors describe as “12 is the new 5”, meaning delivering 20%+ IRR now requires approximately 12% annual EBITDA growth vs. 5% a decade ago.

“In this environment, differentiation is becoming critical,” said Stanley Chen, partner at Bain & Company. “Leading firms are combining deep sector expertise with more rigorous underwriting and hands-on portfolio management. The ability to execute consistently across the investment lifecycle – from sourcing to exit – is becoming a key differentiator.”

Looking ahead, fundraising is expected to remain selective, with competition for capital intensifying and a growing gap between leading and mid-tier firms. Only differentiated, deep-sector GPs with a repeatable model will be best positioned to raise capital and outperform.

Despite ongoing headwinds, improving exit conditions and continued availability of capital suggest that the current environment may present attractive opportunities for well-positioned investors. Firms that can navigate volatility and execute consistently are likely to benefit most in the coming years.

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Media contacts:

Rachel Ng (Kuala Lumpur) – rachel.ng@bain.com

Jasmine Zhao (Shanghai) – jasmine.zhao@bain.com

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