PAG is preparing to raise a new Asia-focused buyout fund of around $4 billion as the investment firm seeks a more geographically balanced portfolio and tests institutional demand for regional private equity. The fundraising plans were revealed by Reuters, citing people familiar with the matter. PAG has informed limited partners about the planned fundraise, although the final target has not yet been determined.
The firm is considering a fund similar in size to its previous buyout vehicle, which closed in 2024 with $4 billion of commitments. One person familiar with the plans said the new fund could ultimately target between $4 billion and $5 billion.
PAG is also seeking to reach a first fundraising close by the end of 2026.
The fundraising comes as PAG works to further diversify its private equity portfolio across Asia after historically maintaining significant exposure to China.
Its previous buyout fund represented an important step toward that diversification. The vehicle was invested roughly evenly across Australia, China, Japan and India, according to a person familiar with PAG’s strategy.
That diversification followed a challenging fundraising environment for China-focused private equity.
PAG originally sought to raise approximately $9 billion for its fourth buyout fund when fundraising began in late 2021. However, the vehicle ultimately closed at $4 billion three years later.
The COVID-19 pandemic, regulatory tightening in China and growing geopolitical tensions between the U.S. and China contributed to weaker participation from North American institutional investors during that period.
The environment has since begun shifting as stronger capital markets in mainland China and Hong Kong create additional exit opportunities, particularly around artificial intelligence and semiconductor companies.
PAG has returned more than $7 billion of capital to fund investors over the past 18 months, according to a person familiar with the firm’s activity. Most of those distributions came from China-related assets.
The scale of those distributions could help PAG as it approaches limited partners for its next fund, particularly as investors continue scrutinizing private equity managers’ ability to generate realizations and return capital.
The fundraising will nevertheless take place against a competitive backdrop.
Asia-based buyout firms have raised approximately $7.4 billion across new funds so far in 2026, according to Preqin data cited by Reuters.
By comparison, U.S. and European private equity managers including EQT, Bain Capital and Blackstone have collectively raised nearly $40 billion this year for pan-Asian strategies.
Many of those larger global funds have increased their focus on markets including Japan and India, where private equity firms have been pursuing expanding pipelines of corporate carve-outs, succession opportunities and growth investments.
Other major managers are also preparing substantial Asia-focused vehicles. Hillhouse Investment is targeting approximately $7 billion, while KKR is seeking at least $15 billion for a new Asia private equity fund.
China-focused fundraising is also showing signs of recovery. Greater China venture capital firms have raised approximately $9 billion so far this year, according to Preqin.
HSG, formerly known as Sequoia China, is separately seeking at least $1.2 billion for an early-stage investment fund and is reportedly considering launching another growth investment vehicle in 2027.
For PAG, the next buyout fund would build on a strategy of spreading capital more evenly across major Asian markets while retaining the ability to invest in China as exit conditions and investor appetite improve.
PAG’s fundraising progress could also provide a broader indication of institutional appetite for Asia-based private equity firms at a time when global managers are raising increasingly large pools of capital for the region.