This week’s edition examines why China’s USD fundraising revival may be more fragile than it looks, and how Indian investment firm Gaja Capital’s IPO potentially opens a new chapter for Asian PE managers.
Hidden pitfalls facing China’s USD fundraising revival
After three gruelling years of record-low US dollar fundraising, Chinese GPs are rushing back into the market to capture renewed global LP interest in the country’s tech sector. With Hong Kong’s progressive tax regimes, a thriving LP ecosystem, and a five-year high IPO deal flow, the city is sitting at the epicentre of a revival in US dollar fundraising efforts. But what looks like a long-awaited USD fundraising window for Chinese GPs carries hidden pitfalls.
Reinforcing this momentum, Unitree Robotics executed a massive STAR Market debut on Wednesday (August 19). Claiming the title of mainland China’s “first humanoid robotics listing,” its stock soared 629.4% on the debut day to reach a $66 billion valuation. On the same day, Hong Kong’s exchange operator HKEX announced a 94% year-over-year (YoY) jump in H1 IPO proceeds to $27.1 billion, spurred in part by “strong interest in Chinese mainland tech and AI-related stocks.”
The IPO momentum is clear. China’s USD fundraising engine is restarting. A wave of top China-focused GPs have resumed USD fund closures and active roadshows since late 2025. Notably, HSG, formerly Sequoia China, this week reportedly began preliminary talks with investors for a fund suite that includes a USD vehicle seeking at least $1.2 billion.
PE powerhouses Alibaba co-founders Jack Ma’s Yunfeng Capital and Joseph Tsai-backed Blue Pool Capital, alongside a slate of venture- and growth-focused GPs including Monolith Management, Source Code Capital, Luminous Ventures, IDG Capital, Qiming Venture Partners, ZhenFund, Future Capital, iMPC, and BA Capital have all returned with new USD fundraising development.
Data from Asante Capital, cited in an August 2 Financial Times story, recorded active fundraising efforts seeking an estimated $35 billion for at least 60 new USD-denominated funds, including about 40 VC funds.
And China-focused GPs are increasingly looking south at Hong Kong for offshore fundraising opportunities. This trend even spans several established Chinese domestic GPs historically known for RMB expertise, including FirstLight Capital. The Beijing-based buyout firm co-led by former Alibaba chairman Daniel Zhang was said to be targeting $1 billion for its debut USD fund leveraging a new Hong Kong office.
Fund managers are drawn to the special administrative region’s favourable tax regimes (incl. pending tax concessions for performance-linked carried interests) and thriving LP ecosystem consisting of government-owned entities like the Hong Kong Investment Corp (HKIC), venture-focused university LPs, and an expanding pool of global family offices and institutional LPs.
Everything looks rosy on the surface, but a closer look at H1 results tells a different story.
Yes, global LPs, mostly from the Middle East, Europe, and Southeast Asia, have started deploying into China again. Total commitments to China-focused foreign-currency funds, predominantly in US dollars, surged 122.5% year-over-year (YoY) to $6.7 billion in the first six months, according to data from Chinese consultancy Zero2IPO Research. Yet LP allocations into China’s primary funds remain highly selective, with the number of newly closed funds in H1 falling 9.5% to just 19.
Despite the absence of US public pensions and large endowments, the good news is that investors from elsewhere have shown greater interest in this market. And much of this interest falls naturally into AI and deeptech, where today’s global landscape is decisively an asymmetric bipolar order dominated by China and the US.
However, the catch is that returning LPs are seen as more willing to carefully assess and pay a premium for IPO-bound assets or directly participate in IPOs via SPVs. They are largely sidestepping blind-pool funds where capital can be locked up for 8-12 years.
This preference for direct IPO participation and quick exits suggests that, at least to some extent, global LPs see this current IPO boom not as a sign of a multi-year bull market but as a rare opportunity to be capitalised on before it closes.
With a pipeline of over 340 active IPO applicants in Hong Kong and exclusive of confidential filings (based on public disclosures on the HKEX website as of August 19), clearing this backlog would take well over three years—assuming the record H1 pace of completing 87 listings could be sustained.
And whether the stock market and retail appetite can absorb this volume of IPO fundraising demand—and by how fast and for how long—remains anyone’s guess. So, it is only natural that global LPs remain highly disciplined in primary fund investments.
Furthermore, while blockbuster tech IPOs like that of Unitree drive unprecedented fundraising pace across private markets, especially in AI and robotics, global LPs harbour growing concerns over valuation speed. With private valuations multiplying within months, investors question if 2026 could be another expensive fund vintage following the prior 2021-22 market peaks, complicating exits 5-6 years down the road.
Adding to that LP anxiety is the persistent reality of potential US-China regulatory shifts. The recent development saw US Treasury Secretary Scott Bessent threaten sanctions on Chinese AI companies over alleged IP theft. And the Federal Communications Commission (FCC) updated its Covered List to ban new foreign-produced advanced robotic devices.
Compounded with Beijing’s potential tiered export control on advanced open-source AI models, GPs must navigate a landscape where geopolitical dynamics constantly redefine commercialisation pathways and, ultimately, portfolio valuations.
What Gaja Capital’s IPO means for Asian PE
In India, the IPO of Gaja Alternative Asset Management, which operates under the Gaja Capital brand, is less interesting for its size but more for what it says about the future of the Asian PE market.
At Rs 550 crore ($57.4 million), the IPO is small by most capital markets standards. The issue comprises a Rs 450 crore fresh issue and a Rs 100 crore offer for sale (OFS), down from the more than Rs 656 crore the firm had originally proposed. With a post-listing market capitalisation of around Rs 2,256 crore ($236 million), Gaja Capital will hardly rank among the country’s more consequential newly listed financial businesses.
Yet the deal deserves attention for reasons more than one.
First, Gaja is set to become the first standalone Indian PE firm to list on the country’s exchanges. More than the capital, the significance is about what exactly is being brought to market: the PE manager itself.
Second, it is about how Gaja plans to use the proceeds. A large part of the capital will go towards sponsor commitments across future funds and a secondaries strategy. This could give the PE firm greater balance-sheet capacity as it raises successive funds, while adding to its management fee income and, over time, carried interest.
Established in 1999, Gaja invests in India’s mid-market businesses across sectors such as education, financial services, consumer, and digital technology. The PE firm reported total income of Rs 158 crore and profit after tax of Rs 82 crore in FY26. Its portfolio includes artificial intelligence and data analytics company Fractal Analytics and logistics firm Xpressbees, among others.
Gaja Managing Partner Gopal Jain provides an important context to the listing event. “…We will have a much higher level of public scrutiny. So far, the scrutiny has been done by our board. We believe this would be good for our business and the sector, and India,” he was quoted as saying in media reports.
Indian PE needs greater institutionalisation, with domestic capital playing a bigger role and strong businesses using public markets to broaden participation. As the industry matures, a listed management company could give institutional investors greater visibility into how the GP is run – from governance and succession to decision-making and economics.
In the US, going public has become a natural next step for PE firms, with Blackstone leading the way in 2007, followed by KKR, Apollo and Ares in the subsequent years. Listing gave founders a way to cash out without selling the business, while opening the door to permanent capital and bringing the visibility and discipline that come with the process of going public.
Meanwhile, in Asia, some of the largest independent PE firms such as PAG, Affinity Equity Partners, MBK, Advantage Partners, ChrysCapital and Kedaara are fully private.
This is partly because markets in Asia have historically struggled to price a fee-and-carry management business, and partly because LP governance expectations were lower and private capital was more readily available.
If Gaja listing sets off a trend, it could give Asian PE firms a new route to permanent capital and succession planning, while allowing founders to monetise their stakes without giving up control of the franchise.
Of late, LP scrutiny has intensified on how PE firms are run as businesses, not just how their funds perform. Questions over who owns the carry when a founding partner retires, how investment decisions are made once the founder is no longer in the room, and whether the governance structure can support a firm raising its fifth or sixth fund are becoming increasingly relevant in LP due diligence.
While a listed PE firm does not automatically resolve all of these issues, its quarterly reporting, public disclosure and market scrutiny bring a greater level of transparency and accountability compared to private partnerships.
In that sense, Gaja’s IPO is not simply about creating liquidity for its founders. It could mark the beginning of a more transparent, institutionally accountable model for Asian PE.
Whether Gaja’s listing trades well this week matters less than what it demonstrates is possible. For the first time in Asia, an independent PE firm has placed itself in the public market domain. If the market responds well, it could potentially set off a trend in the broader region.
Top PE Developments
The LP View
Temasek is building a roster of global general partners focused on single-asset continuation vehicles, and using its wider platform to participate in transactions and provide capital, said Head of Private Equity Capital Solutions and Real Estate, Alpin Mehta.
Fundraising
Partners Group has closed a $1-billion mandate with an Asia-based institutional client to invest in direct lending opportunities across the Asia Pacific.
Blue Pool Capital, a Hong Kong-based multi-strategy investment firm, has raised $1.4 billion for its debut fund, exceeding a $750-million target.
Pictet recently closed the Monte Rosa Co-Investment VI with $1.53 billion in committed capital, as LPs demonstrate a growing appetite for private markets exposure.
Siguler Gulf has closed its $500-million Global Emerging Markets Growth Opportunities Fund II to make more bets on India’s high-growth businesses.
Deals
Tata Capital Healthcare Fund, along with Blue Earth Capital, has invested about $30 million in Indian diagnostic firm Tenet Medcorp Private Limited, confirming an earlier report by DealStreetAsia.
KKR will buy a minority stake in Indian ticketing and live entertainment platform BookMyShow.
Swedish firm EQT might close an investment in Shrewsbury International School Bangkok soon, which could be one of the largest transactions in Thailand’s private education sector.
