What the numbers say: U.S.-based investors contributed at least 60% of the total $200B raised by China-focused funds from global investors over the past decade. Due to rising tensions between the U.S. and China, American funding deployed into China-focused VC and PE funds fell sharply from the peak of $48.6B in 2021 to $16.5B in 2022. This year, the downward trend has continued, with just $1.15B deployed into China-focused funds. What happened: U.S. investors are concerned about the returns on investments due to the geopolitical rift between the two nations and China's regulatory crackdown on domestic businesses, causing them to reduce their commitments to China-focused VC and PE funds. Investors that have pulled back their investments include public pension funds and major U.S. endowments, such as the University of Chicago and the Robert Wood Johnson Foundation, per The Information. Dietrich Foundation — which invested in Chinese VC funds for the past 17 years — has curbed investments in China. Where to see the impact: China-focused funds are now courting investors from the Middle East, specifically Saudi Arabia. In April, Chinese government-backed investment bank China International Capital Corp. set up offices in Saudi Arabia and the United Arab Emirates to connect Chinese VC and PE firms with potential investors in the region. |
