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PAG yuan-denominated fund exceeds initial target, sources

say

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PAG yuan fund will focus on control deals in China

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China PE deals fall to lowest first-half level since 2013

By Kane Wu

HONG KONG, June 25 (Reuters) - Asia-focused investment

firm PAG has raised 3.1 billion yuan ($432 million) in the first

close of its inaugural yuan-denominated buyout fund, exceeding

its target, two people with knowledge of the matter said, as it

looks to deepen investments in China.

The fundraising comes amid a slowdown in China's

dealmaking, pressured by economic headwinds and geopolitical

tensions that have deterred many western investors from the

world's second-largest economy.

Private equity-backed deals targeting Chinese companies

totalled $8.1 billion in the first half of 2025, the lowest

level for the period since 2013, preliminary data from LSEG

showed.

PAG's private equity arm, led by veteran dealmaker Shan

Weijian, has secured anchor investment for the yuan fund from

the government of Suzhou, a city in China's eastern Jiangsu

province, the sources said.

Other investors in the fund include a number of Chinese

insurance companies, they added.

PAG is still fundraising, but first-round commitments have

surpassed its initial target of 3 billion yuan, the sources

said, who declined to be identified as the information is not

public.

Private equity funds typically begin investing after their

first close.

PAG, which manages more than $55 billion of assets with its

main offices in Tokyo, Hong Kong and Singapore, declined to

comment.

In April 2024, public disclosures on a Suzhou

government-affiliated website showed that Suzhou Xiangcheng Fund

Management Co planned to commit to a PAG fund, which has an

estimate size of 3 billion yuan.

Suzhou Xiangcheng Fund Management did not answer calls

seeking comment.

The government of Suzhou did not immediately respond to a

faxed request for comment.

Only three China-focused private equity funds, including all

currencies, have been raised so far this year, totalling a mere

$140 million, Preqin data showed.

Overall fundraising has been on a sharp decline since 2021,

from $129 billion in 2021 to $11 billion in 2024, the data

showed.

PAG and other buyout firms that have traditionally relied on

U.S.-based investors for their Asia-focused funds have

increasingly turned to domestic capital for China deals over the

past three years.