Asia investors stay committed to private markets as geopolitics reshapes allocations

Asia-Pacific investors are factoring geopolitical risks into private market investment decisions more than ever, even as most remain committed to the asset class and continue increasing exposure to secondary transactions, according to a survey by Coller Capital.

Nearly half of Asia-Pacific investors surveyed said the geopolitical environment and outlook are influencing their private market allocation decisions more than in the past, underscoring how trade tensions, supply chain realignments and broader geopolitical uncertainty are increasingly shaping capital deployment across the region.

The findings offer insight into how institutional investors, family offices and wealth managers are adapting portfolio strategies as geopolitical tensions, prolonged exit timelines and shifting capital flows reshape private markets.

Despite the uncertain backdrop, investor appetite for private markets remains resilient. Globally, one-third of limited partners (LPs) surveyed expect to accelerate their pace of commitments over the next two years, while 57% expect to maintain current investment levels.

At the same time, investors are becoming more selective about the fund managers they back.

Almost a quarter of LPs globally expect to reduce the number of general partner (GP) relationships across their private markets portfolios over the next three years, up from 16% when Coller Capital last asked the question in 2020.

Asia-Pacific stood out as an exception, with 53% of respondents expecting to increase GP relationships during the same period.

“Asia-Pacific investors are navigating a different set of considerations to their peers elsewhere,” said Peter Kim, partner and head of Asia-Pacific at Coller Capital.

“Geopolitics is weighing more heavily on allocation decisions here than in North America, and APAC investors continue to show strong appetite for secondaries as a way to actively manage their portfolios,” he said.

That appetite is particularly evident in the secondary market.

While investors globally identified private credit as the asset class likely to see the fastest proportional growth in secondary transactions over the next three years, 57% of Asia-Pacific respondents said private equity offered the greatest opportunity.

The divergence suggests investors in the region continue to see attractive value creation opportunities in private equity despite a slower exit environment.

The survey also found investors remain divided over whether fund managers are striking the right balance between providing liquidity and maximizing long-term value creation.

While 40% said GPs are generally getting the balance right, 39% believe managers are not providing liquidity quickly enough, while 22% said some of the best portfolio companies are being sold too early.

Continuation vehicles, which allow managers to hold assets for longer while offering liquidity options to existing investors, are becoming an increasingly established feature of private markets.

Forty percent of LPs globally expect new continuation vehicle activity to continue increasing even if traditional exit markets improve, while 57% of Asia-Pacific investors expect broader adoption of such structures.

Private credit, meanwhile, appears to be entering a more selective phase. The proportion of investors expecting to increase target allocations to private debt and credit over the next 12 months fell to 29% from 42% in the previous edition of the survey.

However, most investors do not see systemic risks emerging in the asset class, with only 18% expressing concerns about broader market problems.

The survey found limited enthusiasm among institutional investors for tokenised private market funds. Eighty-five percent of respondents said they do not expect their institutions to access private market investments through tokenised vehicles.

By contrast, evergreen funds appear poised for wider adoption. Nearly three-quarters of investors expect the proportion of private market assets held in evergreen structures to increase by 2035, including more than one-third who anticipate significant growth.

The trend reflects growing demand for investment vehicles that offer long-term exposure while providing greater flexibility than traditional closed-end funds.

The 44th edition of the Coller Capital Global Private Capital Barometer surveyed 108 institutional investors overseeing more than $2 trillion in assets globally, including respondents across North America, Europe, Asia-Pacific and the Middle East.