Catenaa, Monday, April 21, 2025- China state-backed funds are cutting off new investment in US private equity, in the latest retaliation against President Donald Trump’s trade war, The Financial Times reported on Monday.
The report, quoting seven private equity executives with knowledge of the matter, said state-backed funds have been pulling back from investing in the funds of US-headquartered private capital firms in recent weeks.
Three of the executives told The Financial Times that the moves come in response to pressure from the Chinese government.
Some of the Chinese funds are also seeking to be excluded from private equity investments in US companies, even if those investments are made by buyout groups based elsewhere, some of the executives added.
The change in approach to the US comes as China has borne the brunt of US tariffs announced in the past three weeks that threaten to significantly curtail trade between the world’s two biggest economies.
President Trump has imposed new tariffs of up to 145% on Chinese exports and Beijing has retaliated with 125% tariffs.
Multiple buyout executives told The Financial Times, Chinese investors have changed their approach to US private equity since the trade war began. They will no longer make new fund commitments to US firms, the people said.
China Investment Corporation is among the state-backed funds that are pulling back, according to two people familiar with the details. Other Chinese funds had also retreated, the people said.
In recent decades, Chinese sovereign wealth funds have poured billions of dollars into many of the largest US private capital groups including Blackstone, TPG and Carlyle Group. There had already been a slowdown in CIC’s private equity investments in the US in recent years, according to industry executives.
