Zhang Yichen Says Buyout Funds May Define China’s Next Capital-Market Cycle, Not IPOs
Updated
Updated · South China Morning Post · Jul 19
Zhang Yichen Says Buyout Funds May Define China’s Next Capital-Market Cycle, Not IPOs
1 articles · Updated · South China Morning Post · Jul 19
Summary
Buyout funds, rather than IPOs, may shape China’s next capital-market cycle, Citic Capital chairman and CEO Zhang Yichen said in an interview during the annual “two sessions.”
Zhang argued that China needs more direct and equity financing because its bank-led system has historically lacked long-duration capital needed for the “patient capital” regulators are urging.
Patient capital, he said, is not just holding assets longer; buyout managers must also improve governance, operations and strategy to create value inside portfolio companies.
Geopolitical tensions are also reshaping dealmaking, with multinationals increasingly relying on local partners to operate in China, while Zhang highlighted Hong Kong’s continuing strategic role as a global financial centre.
Is China’s pivot to state-backed buyouts a masterstroke for innovation or a path towards a debt crisis fueled by massive overinvestment?
As Beijing champions 'patient capital', why did a record $809 billion flee China in 2025, and can this massive capital flight be reversed?
From IPOs to Buyouts: The New Era of Patient Capital and Strategic Investment in China's Private Equity Market
Overview
China's capital markets are shifting from relying on IPOs to being driven by buyout funds, marking a major transformation. This change is led by figures like Zhang Yichen and is fueled by a maturing market, the rise of patient capital, and a new focus on long-term value creation. As opportunities for quick, early-stage growth fade, investors now seek sophisticated strategies that improve operations and restructure existing companies. The market's strategic direction is moving toward sustained development and continuity, making buyout funds central to China's next phase of economic growth.