China’s private fund industry has seen its assets under management climb to a record high, buoyed by rebounding market confidence and a surge in technology-related investments.

The nation’s private investment funds had assets totalling 23.46 trillion yuan (US$3.46 trillion) as of the end of April, up from 20.22 trillion yuan a year earlier, according to data released by the Asset Management Association of China on Wednesday.

The industry – which spans private equity, venture capital and private securities investment funds – is a vital part of China’s capital market, which propels the growth of a large number of tech start-ups.

Its resurgence has followed Beijing’s introduction of a slew of policies to overhaul the stock market and revive investor confidence since 2024, with China’s leaders repeatedly calling for a “deep transformation” of the capital market to attract long-term investment in promising tech companies.

“A new investment narrative is taking shape in China’s market,” said Zhao Xijun, co-dean of the China Capital Market Research Institute at Renmin University of China. “Investors are paying more attention to companies’ innovation capabilities and long-term growth potential, rather than focusing only on short-term profits.”

China’s private equity and venture capital market has shown signs of recovery this year. Total investment activity reached 234.4 billion yuan in the first quarter, up 24.7 per cent compared with the same period last year, according to data from Zero2IPO Research.

AI-related start-ups were a major driver of the rebound, raising more than 110 billion yuan in the first three months of the year – up 185 per cent year on year.