Over 70% of private equity firms are clustered in "Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou." Which other cities are emerging as new options for settling down?

Special Topic: 2026 Billion Private Equity Tour: Quantitative Leadership, Concentration of Top Firms, Emerging New Giants, Private Equity Industry Enters a New Stage

Jiemian News Reporter | Long Li

Cities such as Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, and others, which occupy core positions in the national wealth landscape, inherently possess a stronger appeal for private equity firms targeting high-net-worth individuals.

Data from Private Equity Rankings indicate that as of the end of January 2026, among the 7,503 securities private fund managers nationwide, 5,413 are headquartered in the five major cities of Beijing, Shanghai, Guangzhou, Shenzhen, and Hangzhou, accounting for approximately 72.14%. Furthermore, the clustering effect of leading private equity firms is even more pronounced: out of 243 securities private funds with management scales exceeding 5 billion yuan, 213 are based in these five cities, representing 87.65%.

Li Chunyu, Fund Manager of Rongzhi Investment FOF, analyzed for Jiemian News that the high concentration of private equity firms in Beijing, Shanghai, Guangzhou, Shenzhen, and Hangzhou is primarily due to three advantages of these cities: First, resource aggregation—high-net-worth clients, channels, and services are densely concentrated, resulting in high fundraising efficiency; second, talent and information advantages—investment research talent is concentrated, information flows rapidly, facilitating strategy iteration; third, mature supporting infrastructure—regulatory and compliance environments are well-developed, operational efficiency is high.

Of course, there are also significant hierarchical differences among these five cities regarding the total number of securities private funds and the incubation capacity of top firms.

Shanghai has successfully attracted 2,006 private funds to establish their offices there, including 108 top private funds, with a promotion rate (number of top securities private funds in the area / total securities private funds in the area) of 5.38%, ranking first among the five cities in all three metrics.

An industry insider told Jiemian News that Shanghai’s unique advantage is that it is the only place in China that hosts all three major exchanges: securities, futures, and financial futures. For quantitative private funds that prioritize trading speed, this physical proximity is unmatched by other cities, attracting nearly 40% of quantitative private funds nationwide and incubating many top quantitative private funds.

The total number of private funds based in Shenzhen and Beijing are similar, both around 1,200, but Beijing has more top private funds, with 57 compared to Shenzhen’s 26.

Hangzhou and Guangzhou also have similar total private fund counts—471 and 441 respectively—but the number of top private funds in these cities differs by an order of magnitude. Hangzhou has 20 top private funds, accounting for 4.25% of its total, with a promotion rate surpassing Shenzhen’s 2.08%. Guangzhou has only 2 private funds with management scales exceeding 5 billion yuan, making it the city with the fewest top private funds and the lowest promotion rate among the five.

Figure: Total number of securities private funds and top securities private funds in the five major cities (by office location) Data source: Private Equity Rankings, Jiemian News compilation

On the other hand, although the five major cities remain the most attractive for private funds, many private funds have chosen to settle in other cities in recent years. Data from Private Equity Rankings show that as of the end of January 2026, there are 2,090 securities private funds based outside the five major cities (referred to as “other cities”).

Specifically, Chengdu, Xiamen, Nanjing, and Changsha each attract over 100 private funds; Zhengzhou, Wuhan, Xi’an, Fuzhou, Ningbo, and Dongguan also gather more than 80 private funds, forming certain clustering effects. Additionally, five other cities have private fund counts over 50, ten cities have between 20 and 50, and the remaining cities have fewer than 20.

Figure: Total number of securities private funds in other cities (by office location, only cities with at least 20 funds shown) Data source: Private Equity Rankings, Jiemian News compilation

Li Chunyu believes that some private funds choose to set up in second- and third-tier cities mainly due to cost and policy considerations. These cities offer lower labor and rental costs, often provide local tax incentives and subsidies, and some private funds pursue operational focus, seeking to stay away from market noise and concentrate more on research and risk management to achieve differentiated development.

In terms of management scale, among the 2,090 private funds based in other cities, 1,820 have management scales of 0-5 billion yuan, accounting for 87.08%. There are 135 with 5-10 billion yuan, 62 with 10-20 billion yuan, and 43 with 20-50 billion yuan, collectively representing 11.48%. Additionally, 30 private funds have management scales of 50 billion yuan or more, successfully entering the top private fund ranks, accounting for about 1.44%.

Among these, the private funds with the largest number of top management scales located in Zhuhai, totaling 8. Private funds based in Chengmai, Nanjing, and Xiamen number 5, 4, and 3 respectively, even surpassing the number in Guangzhou. Sanya has 2 top private funds, while Changdu, Zhaoqing, Zhongshan, Dongguan, Haikou, Chongqing, Lhasa, and Chengdu each have one.

Additionally, data from Private Equity Rankings show that among the 2,090 private funds based outside the five major cities, 1,631 have both registration and office addresses outside Beijing, Shanghai, Guangzhou, Shenzhen, and Hangzhou. Meanwhile, 459 private funds have their office locations in other cities but are registered in the five major cities.

Li Chunyu told Jiemian News that some private funds adopt a model where registration and office locations are separated to seek regional policy benefits, balance costs and core resources, and facilitate regional business expansion. However, such arrangements can also increase compliance and communication costs, requiring consistent information sharing and regulatory compliance between the two locations, thus increasing management complexity. In the long run, if operated properly, this approach can balance policy incentives and operational efficiency.