Secondary trades of private equity assets in China were set to accelerate after a strong first half of the year, with Canada’s No.2 pension manager and a China-focused buyout firm among those preparing to sell assets worth potentially billions, according to sources. Secondary transactions in private equity involve the buying and selling of fund portfolios or direct stakes in private companies, allowing investors to exit outside the usual investment cycle.
Industry sources said steep discounts offered by sellers were attracting buyers who maintained confidence in China’s long-term growth prospects. Many of the selling funds faced pressure to repay investors but struggled to find trade buyers or pursue listings on public markets due to economic and geopolitical challenges.
Canada’s Caisse de dépôt et placement du Québec (CDPQ), which halted PE investments in China two years ago, was considering selling around $2 billion in assets via secondary trades, most of them China-based, two people familiar with the matter said. CDH Investments, a China-focused buyout fund, was also working to raise a multi-asset continuation vehicle that would let some investors cash out of its existing portfolio, the people added. A continuation fund is an investment structure that enables PE firms to shift existing holdings into a new vehicle, giving investors the choice to maintain or exit their positions.
CDPQ declined to comment, while CDH did not respond to a Reuters request. The sources requested anonymity as the talks remained private.
China recorded 731 secondary trades involving yuan-denominated funds in the first half of 2025, totaling 77.3 billion yuan ($11 billion), a record level and an 89% increase year-on-year, according to data provider ZERONE. Comparable figures for U.S. dollar-denominated assets in China were not publicly available.
Global alternative asset manager LGT Capital Partners noted in a July industry paper that it was a favorable time for investors with long-term views on China to acquire quality assets at discounts amid easing regulatory risks. Doug Coulter, LGT’s Hong Kong-based partner and co-head of Asia Pacific private equity, said the firm expected most of its short- to medium-term China capital deployment to be through secondaries.
In June, LGT disclosed it had co-led $500 million in continuation vehicles for 13 assets managed by China-focused venture capital firm IDG Capital, though it did not reveal the level of discounts applied to the trades.
Source: Reuters
