China’s private funds see assets soar by over US$400 billion amid tech boom

China’s private investment fund industry reached a record high of 23.46 trillion yuan (US$3.46 trillion) in assets under management as of April, driven by a significant surge in technology-related investments. This growth reflects a recovery in market confidence following Beijing’s policy initiatives to modernize the capital market and attract long-term capital into innovative sectors. For the private equity and venture capital space, this resurgence signals a shift toward high-growth tech start-ups and a potential reopening of exit channels through a revitalized initial public offering market.

The Asset Management Association of China reported that total assets in the private fund sector—encompassing private equity, venture capital, and private securities—rose from 20.22 trillion yuan a year ago to 23.46 trillion yuan by the end of April. Within this total, private equity funds represent the largest share at 11.38 trillion yuan, followed by private securities investment funds at 7.85 trillion yuan and venture capital funds at 3.96 trillion yuan. This expansion is largely attributed to a new investment narrative where investors prioritize innovation and long-term growth over short-term returns, a shift supported by Beijing's efforts to overhaul the stock market and attract institutional capital into promising technology companies.

Investment activity in the private equity and venture capital segments saw a robust 24.7 percent year-on-year increase in the first quarter, totaling 234.4 billion yuan according to Zero2IPO Research. Artificial intelligence has emerged as a primary catalyst for this rebound, with AI-related start-ups securing more than 110 billion yuan in the first three months of the year, representing a 185 percent increase compared to the previous year. Additionally, private securities funds have seen a massive spike in activity that coincides with a broader upsurge in China’s stock markets; over 1,600 funds were registered in April alone, and new filings for the first four months of the year reached 254.1 billion yuan, more than double the level seen a year earlier.

The recovery of the Hong Kong initial public offering (IPO) market has provided a critical boost to investor sentiment by reopening essential exit pathways for private equity and venture capital firms. In 2025, Hong Kong’s IPO market raised HK$272.1 billion (US$34.7 billion) across 100 listings, a 210 percent increase year-on-year, fueled by a revival in technology listings and secondary listings from mainland Chinese firms. Industry executives at a recent CVInfo conference expressed optimism that 2026 could serve as a potential harvest year for the sector, marking a significant turnaround and a period of realization for investments made during the recent market downturn.