Shein's PE backers may have to hold on a little longer

Shein's PE backers may have to hold on a little longer

Sat, August 22, 2026 at 12:25 AM GMT+3 3 min read

Richard A. Brooks/Getty Images

Shein is asking some of its existing investors to invest in an initial public offering that is supposed to give them an exit. While it's a welcome development for some, a series of failed attempts to go public means skepticism remains.

Bloomberg reported on Thursday that Chinese investment manager Boyu Capital and UBS Asset Management are in talks to become cornerstone investors in the online fast-fashion retailer's Hong Kong listing. Shein has set aside at least $400 million of stock for cornerstone investors and is seeking to raise about $2 billion overall at a valuation of $26 billion to $27 billion.

Tencent and General Atlantic are among the other existing investors weighing commitments, according to the report.

Boyu is one of Shein's largest identifiable shareholders, owning Series D and D+ preferred shares at prices implying a value of roughly $815 million, according to Shein's draft IPO prospectus. The Hong Kong firm was founded in 2010 by partners including Alvin Jiang, a grandson of Jiang Zemin, leader of the Chinese Communist Party from 1989 to 2002.

The discussions are another twist in a journey that has taken years.

Shein's repeated attempts to list have become a source of frustration for investors waiting for distributions, said one limited partner whose portfolio holds stakes in the company through several funds. The person, who described the cornerstone talks as welcome news, said investors have spent years watching the company pursue different listing venues without reaching the public market.

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Hong Kong would be the company's third attempt to list, after previous efforts in New York and London collapsed.

The company confidentially filed for an IPO in the US in November 2023 but encountered scrutiny in Washington over its supply chain, China ties and heavy reliance on the de minimis trade exemption. Shipments valued at $800 or less used to enter the United States duty-free. The Trump administration ended this exemption for Chinese- and Hong Kong-made goods in May 2025 and for goods from the rest of the world in August.

Shein subsequently turned to London. The UK's Financial Conduct Authority approved its prospectus, but the transaction failed to secure the necessary clearance from Chinese regulators.

Shein later shifted to Hong Kong, receiving approval from China's securities regulator in July. But listing on a less well-capitalized exchange means a substantially lower valuation.

Shein was valued at $98.2 billion in a 2022 financing and $64 billion to $66 billion in a 2023 round, according to the prospectus. An IPO between $26 billion and $27 billion would value the business roughly 73% below its peak.

A listing would not deliver immediate liquidity. Cornerstone buyers accept a six-month lockup, and existing holders face sale restrictions.

Funds managed by venture firm HongShan, General Atlantic, Tiger Global, IDG Capital, Coatue, D1 Capital, Brookfield and Greenwoods are all shareholders in Shein, according to PitchBook data. New York State Common Retirement Fund committed $25 million to Boyu Capital Fund V in 2021, the vehicle that holds Boyu's Shein stake. Alaska Permanent Fund also committed $40 million to Boyu Capital Fund V.

Shein's operating performance has also weakened during the wait. Revenue rose 8% to $41.8 billion in 2025, compared with growth of more than 20% the year before. Net profit fell nearly 39% to about $2.1 billion. In the first quarter of 2026, Shein recorded a $99 million net loss, versus a $395 million profit a year earlier, while US revenue dropped about 14%.

This article originally appeared on PitchBook News