Growth in private markets has been unprecedented. Figures from fund administration provider Ocorian show that US-domiciled private asset volume grew more than 300% over the last ten years to US $7.24 trillion, or 52% of the $14 trillion global total, with Asia holding 25% and Europe 19.4%.
But last year was not uniformly positive for private assets. According to Elsa Sit, vice president, Asia Pacific private equity practice at Bain & Company, 2025 was full of turbulence and volatility for the Asia Pacific private equity market, and that the rebound that had been expected didn’t occur.
Collwyn Tan, co-head of Asia investments at Hamilton Lane, notes that public equities in many markets are at elevated levels, creating valuation risk and that such periods have historically reinforced the strategic role of private markets.
This year should be more constructive for private markets, with improving liquidity conditions and accelerating adoption of artificial intelligence across both deal sourcing and portfolio operations, says Chris Cho, partner, investor relations at Adams Street Partners. He foresees stronger exit pathways, with increased initial public offerings activity and mergers and acquisitions.
Tan says ongoing geopolitical tensions and policy uncertainties mean that “diversified portfolio management is paramount”, though the underlying structural growth themes, particularly in Asia, remain intact.
In Asia, Sit notes that Japan has flourished for both deals and fundraising with ample carve-outs and take private opportunities, followed by India. And Greater China is gradually recovering, thanks to a booming public market.
Tan highlights advanced manufacturing supported by artificial intelligence, as well as healthcare services among the sectors in Asia that are of interest for private markets.
Kelvin Yap, managing director at HarbourVest Partners, voices a cautiously optimistic outlook, cautioning that “success will hinge on agility, innovation, and disciplined execution” amid geopolitical tensions and potential bubbles.
“Inflection point”
Alter Domus, which provides fund administration services for alternative investment funds, sees private equity as being at “an inflection point” as both exit and deal opportunities appear to be recovering, while new techniques developed to tackle recent difficulties, such as continuation vehicles and new fundraising channels, have redefined the industry.
Sit says buyouts remain popular in Asia Pacific due to control over value enhancement, and that private debt and value-added infrastructure are also gaining traction, while performance disparity is growing between top and bottom performing general partners.
“Asia stands out for control-oriented buyouts,” says Tan. Secondaries offer lower entry and exit risks, plus net asset value discounts that counter high public markets valuations. Franklin Templeton also favours secondaries due to attractive fundamentals and built-in structural advantages.
Cho predicts co-investments will be boosted by narrower bid-ask spreads. On the sell side, he says general partners are dealing with increasing pressure from limited partners to deliver distributions, pushing more assets to market.
Meanwhile, private credit “will continue to be the star of the private markets’ universe”, according to Tan.
The asset class enters 2026 strongly placed after growing vigorously. However, it’s likely to face a more challenging environment as lower interest rates, greater competition and changing deal dynamics prompt managers to adjust their strategies.
Real estate is kicking off the year in a better position with lower interest rates, narrower bid-ask spreads and reviving deal activity, according to Alter Domus. But recovery is patchy and selective, favouring urban centres in markets such as Japan and India.
AI-focused data centres create one of the strongest and most persistent real estate and infrastructure opportunities of recent years. Yap says infrastructure is becoming “a cornerstone of AI‑enabled growth, with record fundraising, expanding global pipelines, and surging demand for digital and energy assets”.
Asia lures
Softening LP appetite and challenges returning money to investors were significant issues for some private market strategies in 2025.
According to Sit, LPs are busy rebalancing their portfolios towards long-term strategic allocation targets rather than timing the market. But some more mature and stable investors are showing greater appetite for active co-investment and direct investment.
Tan says institutional investors are increasingly looking to diversify away from the US, with many turning to Asia, drawn by sustained growth and attractive valuations in the region.
Sit expects a flight to quality in private market funds to continue, with LPs likely to prioritise flagship funds with strong track record and differentiated strategy.
