PE Firms Trapped in China After $1.5 Trillion Betting Spree
- Buyers for private sales have sought discounts exceeding 60%
- Some firms also weigh delaying exits with continuation funds
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Private equity firms that amassed more than $1.5 trillion of assets in China in just two decades are now struggling to offload once-promising investments they were counting on for hefty returns.
With public markets in a slump and offering unattractive valuations, buyout firms are exploring private sales. But mounting concerns about the risks of investing in mainland China have left so-called secondary buyers demanding discounts of 30% to more than 60%, according to people familiar with the market. Haircuts in Europe and the US are closer to 15%.