Hong Kong PE firms turn to control deals

Hong Kong-based private equity firms are increasingly pursuing controlling stakes in companies as they seek to generate returns for investors, according to a report by Asian Business Review. This shift towards control deals follows years of limited exit activity in Asian private markets, prompting managers to focus on value creation through operational enhancements and acquisitions.

Yuki Ishida, director and group CEO of YCP Holdings, noted that private equity investors have engaged in about $165.5bn of buyout transactions in 2026, twice the $80.8bn invested in growth deals. Hong Kong funds have raised $135.6bn through three buyout vehicles this year, with EQT's BPEA Private Equity Fund IX leading with $122.3bn.

Managers are targeting mid-sized businesses as platforms for further expansion, including through bolt-on acquisitions. Recent examples include Boyu Capital's acquisition of a 60% stake in Starbucks China for around $31.4bn and Templewater's expansion into the healthcare sector via acquisitions like The Women’s Clinic Group and Ascensus Health Group.

The renewed emphasis on control investments stems from limited partners' increased focus on distributions following a prolonged slowdown in private market exits. Deal activity in Hong Kong itself has been relatively selective, with 14 transactions recorded in the first half of 2026, unchanged from the same period a year earlier, and an estimated deal value of $2.3bn, down from $2.9bn.

While activity remains concentrated in Hong Kong, private equity firms are also deploying significant capital in other regions, with Asia accounting for 35 out of 61 transactions announced this year, valued at approximately $11bn. The US, Mainland China, the UK, and Australia attracted around $10.5bn, $8.6bn, $6.7bn, and $2.8bn, respectively.