The Chinese government is going to invest $3 billion in US private equity giant Blackstone. Even the communists cannot resist the returns that these firms are getting by taking companies private. The Chinese will have non-voting shares after the Blackstone IPO, and have agreed not to invest in any Blackstone competitor for at least year.

According to The Wall Street Journal: "Investing at the management-company level -- rather than just giving Blackstone money to manage -- appealed to China as a way of benefiting from the plethora of fees Blackstone takes from its investments."

The announcement may be a signal of several things. The first is that governments may be looking at ways to invest money to give more aggressive returns. While corporations and institutions do this now, it would not be surprising to see other countries decide to make investments similar to the Blackstone deal. There are enough large private equity firms to make this possible.

Another aspect of the announcement is that it may be a signal that private equity has peaked. Obviously, smart money has been in firms like Blackstone and KKR for some time. But, to think that the Chinese government has come to the point where it is not happy with the returns that it can get in US government securities and traditional investments may mean that money flow into operations like Blackstone could further fuel what may becoming a buyout bubble.

Too much money chasing too little value.

Douglas A McIntyre is a partner in 24/7 Wall St.