Investing.com -- Amid an escalating trade war between the world’s two largest economies, China’s state-backed funds are reducing their investments in U.S.-based private capital firms, according to a Financial Times report published on Monday.

The report also revealed that some Chinese funds are requesting to be exempted from investments in U.S. companies made by private equity firms located elsewhere. This information was shared by seven private equity executives who have knowledge of the situation.

In addition to this, the report indicated that numerous buyout executives will not be making new fund commitments to U.S. firms. Some are even backing out of planned allocations, particularly in cases where they had not yet made a final commitment.

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