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The world’s largest private equity groups have been unable to sell or list their China-based portfolio companies this year, as Beijing’s crackdown on initial public offerings and a sluggish economy have left of the capital of foreign investors trapped in the country.

Among the 10 largest global private equity groups with operations in China, there is no record of anyone listing a Chinese company this year or completely selling their stake through an M&A deal, figures from Dealogic show.

This is the first year in at least a decade where this has been the case, although the exit pace has slowed since Beijing introduced restrictions on the ability of Chinese companies to list in 2021.

Buyout groups rely on being able to sell or list companies, usually within three to five years of buying them, to generate returns for pension funds, insurance companies and others whose money they manage.

the difficulties in doing so in effect leaving investors’ funds locked up, with future returns uncertain.

“There is a growing feeling among PE investors that China may not be as systemically invested as previously thought,” said Brock Silvers, chief executive of Hong Kong private equity group Kaiyuan Capital.

He said companies face “weak exit strategies in many areas” of Chinaincluding the impact of a slower economy and domestic regulatory pressure.

Several private equity groups have expanded their presence in the world’s second-largest economy as it has grown rapidly over the past two decades. Global pension funds and others are plowing capital into the country, hoping to spark economic growth.

The 10 companies invested $137bn in the last decade, but the total exit amounts to $38bn, Dealogic data shows. New investment in groups has collapsed to $ 5 billion since the beginning of 2022.

The pace of buyout groups from global deals is also slowing. It fell 26 percent in the first half of this year, according to a report by S&P Global.

But the stoppage in China’s exit is even worse. This has helped make some pension funds that allocate money to private equity groups more wary of country exposure.

“In theory, you can buy cheap (in China) now but you have to ask what happens if you can’t get out or if you have to hold it longer,” said a private market specialist in a large pension fund that is not currently invested in the country.

A senior executive at a major investment group that commits money to private equity funds said they “don’t expect many exits for the next couple of years at least” in China. .

The data includes Blackstone, KKR, CVC, TPG, Warburg Pincus, Carlyle Group, Bain Capital, EQT, Advent International and Apollo, the 10 largest buyout groups by funds raised for private equity in the past that decade, excluding those who did not make the deal. in China. The data does not include Blackstone real estate deals.

Private equity firms sometimes buy or sell companies without disclosing them, and any such exits can be lost in the data. The companies declined to comment.

The difficulty of cashing out is one of the main factors that prevent international buyout groups from making investments in the country, in addition to Sino-US tensions and the economic slowdown.

Jean Salata, the founder of Barings Private Equity Asia, which was bought by Stockholm-based EQT in 2022, told the Financial Times in June that one reason “The bar is high” for deals in China That’s why investors ask: “How easy will it be to get liquidity in investments five years from now?”

Foreign buyout groups used to rely on taking Chinese companies public in the US or other countries to exit their investments after a few years. But Beijing has introduced new restrictions on offshore listings since cracking down on ride-hailing app DiDi, following its New York IPO in 2021. Listings have slowed significantly since then.

Overall this year, there were just $7bn in domestic IPOs in China as of late November, compared to $46bn last year, which is the lowest total since 2019.

The crackdown left buyout groups looking for other options, such as selling their stakes to local and multinational companies and other buyout groups. But overseas buyers are sometimes reluctant, in part because of closer US political scrutiny on the mainland.

One of the few recent exits of the 10 companies came when Carlyle sold its minority stake in McDonald’s Chinese operations back to the US fast-food retailer last year.

In China’s boom years before the Covid-19 pandemic, there were many exits through listings and mergers and acquisitions, and foreign private equity played an increasingly large role in driving mainland activity. .

Goldman Sachs chief executive David Solomon said at a conference in Hong Kong in November that one of the reasons investors “mostly on the sidelines” due to the deployment of funds in China so “it is very difficult . . . to get the capital.”