DealStreetAsia’s inaugural Asia Private Equity Leadership Summit in Hong Kong drew participants from across the region for a full day of curated discussions around investment opportunities and emerging trends across the Asia Pacific.
Speakers from the biggest allocators and managers highlighted the key areas that are top-of-mind for many, such as investing in the fast-growing deep tech and AI sectors; capitalising on cross-border links, such as the Asia-Gulf corridor; leveraging on relationships and boots on the ground in what is a diverse region; and the need for governance and market discipline.
Here are the five key themes that emerged from those conversations.
LPs seeking liquidity drawn to Developed Asia
Developed markets in Asia are drawing more private capital as investors seek clearer exits, stronger governance, and proven returns after several difficult years for China and parts of Southeast Asia.
Japan is leading the shift, while Australia and Korea are also gaining attention from limited partners looking beyond growth-led Asia exposure.
Investors are also moving towards thematic and manager-led allocation frameworks and deploying capital beyond traditional buyouts. Speakers pointed to infrastructure, data centres, healthcare, energy transition, structured capital, and private credit as areas of growing interest.
Still, for investors, the challenge is no longer simply whether to allocate to Asia, but how to build portfolios across a diverse region, where markets are increasingly decoupling from one another in terms of liquidity, valuations, policy direction, and exit opportunities.
Indeed, years of weak exits and uneven manager performance have made allocators selective, and while there are early signs of liquidity, the recovery remains uneven.
“We need to see more than marquee assets being sold,” said Brian Lim, Partner and Head of Pantheon Ventures’ Asia and Emerging Markets Investment teams.
To that end, some managers are expecting to see stronger secondaries deal flow in the second half of 2026 in the region, as the market enters a major growth phase even as it still accounts for a fraction of global transaction volumes.
In the LP-led market, Asia-focused funds generally trade at wider discounts than US or European funds due to a smaller buyer base and less predictable exits, particularly in venture and growth strategies. In the GP-led market, high-quality assets continue to attract strong pricing and buyers’ interest.
To be sure, sellers remain cautious about running sale processes amid heightened uncertainty and volatile market conditions. Buyers are also taking a more conservative approach when evaluating assets, particularly in sectors exposed to shifting commodity prices, supply chain disruptions, and broader macroeconomic risks.
Invest in Chinese deep tech and AI, or else
Chinese deep tech and AI are such dominant investment themes in private markets that lacking exposure to these sectors is considered a risk. From global asset managers and domestic capital allocators to corporate venture arms and university endowments, the consensus is that China has caught up with the US in AI model performance while taking a global lead in a number of critical technologies.
However, developing next-generation AI and succeeding in this market can be extremely capital-intensive. A larger balance sheet offers a distinct competitive edge in recruiting top talent and running more advanced models.
As AI financing drives the majority of gains in China’s overall startup investment landscape since 2025, founders should consider raising larger cheques more frequently, speakers said. This also applies to deep tech IPOs—especially in Hong Kong, where the stock market remains “red hot,” with over 500 applications queued for listing as of mid-April.
Scope for private credit to expand in Asia, but due diligence vital
Investors are drawn to Asia-focused private credit strategies for several reasons. Apart from portfolio diversification, with a lower correlation with the markets in the US and Europe, the managers also see less competition compared to the more mature markets, better terms and covenants, and, notably, are able to access proprietary deal flow through boots on the ground.
Speakers representing the spectrum of segments and strategies within private credit – from global managers Ares, Bain, and KKR at the top end of the market, to middle market specialist Flow Capital, and Australia-focused MA Financial – pointed out that while the issues seen in the US private credit sector are not yet present in Asia due to the lower level of competition and capital inflows, but vigilance is required as the market matures.
Ultimately, the market is expected to grow from the less than 2% of global private credit assets under management, owing in part to the gap between the region’s economic scale and the relatively small size of its alternative capital pool.
Sectors with strong growth potential for private credit include real estate, infrastructure, and digital/AI-related assets such as data centres. There is also growing interest in asset-backed lending, aviation, and intellectual property financing.
The private wealth opportunity in Asia Pacific
Global private market firms are rapidly expanding their programmes in key Asian markets not only because of the region’s growing availability of capital, but also the evolution of investor behaviour. Asia still presents a lot of untapped opportunities across Japan, and even more well-known markets for private wealth, such as Hong Kong and Singapore.
Even so, the speakers on the private wealth panel asserted that managers should focus on building investment programmes and constructing products that fit preferences in each jurisdiction, as investors take time to understand them, their investment theses, and their governance standards.
India PE is maturing
Over the past five years, Japan and India have become key regions for private equity in Asia, though their experiences differ. Japan has attracted a diverse array of investors, while India has tended to favour experienced managers, making it challenging for newcomers to secure capital from abroad. Nonetheless, India’s domestic market is growing, contributing positively to the Asia PE landscape despite historical baggage and muted investor sentiment.
And, the fact that the market is slowly evolving into a buyout market is an indication of maturity, speakers said. At the same time, policies recognising alternative assets as vital for attracting foreign direct investment, as well as the deployment of local capital, are also evolving.
While external factors may temporarily influence capital flows, the long-term attractiveness of sectors like infrastructure, financial services, and certain tech services indicates a structural shift that will likely continue to attract investment.
