China’s private investment funds achieved an average return of more than 25% in 2025, driven by the strong performance of the country’s equity market, while global private funds also began returning to Asia – particularly China – injecting renewed momentum for continued growth.

Among the 9,934 Chinese private investment funds, 8,915 delivered positive returns, accounting for 89.74% of the total. The average overall return reached 25.68%, while the median return stood at 18.78%, according to data provider Shenzhen PaiPaiWang Investment & Management.

The equity strategy stood out in terms of performance. Of the 6,298 funds under this category, 5,680 achieved positive returns, representing 90.19% of the total. The average return reached an impressive 29.99%, according to the data provider, reflecting strong investment opportunities in China’s stock market throughout 2025.

The reshaping of the international monetary system has driven capital to shift toward non‑US dollar assets, while domestic breakthroughs in industrial innovation – particularly in artificial intelligence and new energy – have triggered a reversal in the technology narrative.

China’s A‑share market experienced strong upward volatility, with the ChiNext index surging by about 50% in 2025, providing a solid return foundation for private investment funds focusing on equity strategies.

“We also expect Asia funds to increase their share of global fundraising this year,” notes Anthony Vasey, Herbert Smith Freehills’ private capital partner, “as appetite for investment in China returns and given potential constraints in Europe to absorb available capital.”

Under supportive policy guidance, medium‑ and long‑term funds continued to flow into the market, while household savings shifted toward the capital market. This further improved market liquidity and supported the strengthening of equity assets.

Investment strategies remained highly aligned with market structure. Equity strategies captured opportunities in the rising stock market in 2025, while multi‑asset and fund‑of‑funds strategies effectively smoothed out volatility through cross‑asset allocation and diversified investment.

Collectively, these approaches precisely matched the structural opportunities in the market and successfully captured upside potential across different asset classes.

Entering 2026, China’s innovation capacity now underpins a renewed economic model focused on quality growth, productivity enhancement and global competitiveness, argues BNP Paribas Asset Management, with significant and increasingly positive implications for China’s equity markets.