Private capital markets across Asia-Pacific are heading into next year on stronger footing, though recovery remains uneven and incomplete, according to PitchBook.
Writing in the research firm’s 2026 private capital outlook, APAC private capital director of research Ansel Tan and research analyst Melanie Tng said they anticipate a period of mixed recovery across the region next year.
“For 2026, APAC’s outlook is one of gradual normalisation rather than broad acceleration. The regional landscape continues to fragment along lines of depth, policy stability, and domestic capital capacity,” the pair wrote.
While they see APAC private market deal activity rising with easing global monetary policy, Tan and Tng noted that fundraising and capital deployment will remain somewhat cautious amid persistent risk aversion.
Reflecting on 2025, Tan explained that Asia’s private market sentiment began the year “sanguine” before being weighed down by rising tariff and geopolitical tensions. He identified liquidity as the key ongoing challenge, noting that limited exit activity continues to restrict distributions and dampen fundraising across the region.
However, looking ahead, he outlined a path of “cautious optimism”, arguing that visibility has improved, supported by a more favourable interest rate environment.
“Lower rates influence private capital markets through multiple channels. Most directly, leverage financing becomes cheaper.
“As financing costs recede, sponsors gain more room to optimise capital structures on acquisitions, improving deal economics and facilitating larger transaction sizes,” Tan explained, adding that lower interest rates also tend to support improved asset valuations.
While he acknowledged that central banks across the region will not act in unison – particularly as money markets are now pricing in a one-in-four chance of a rate hike in Australia from as early as February – Tan argued that the overall trend of easing in 2025 has set the stage for this conducive backdrop.
APAC exits to recover
Meanwhile, the firm also predicted that APAC exit activity will recover in 2026 as trade tensions ease, although it said the pace and nature of the recovery would vary significantly by market and exit type.
Backed by robust institutional investor bases, regulatory reforms, and consistent corporate activity, Tng identified India and Japan as the continued leaders of the region in market dynamism.
By contrast, she said China’s private markets will become more inward-looking, dominated by renminbi-based funds, local LPs, and policy-backed industrial investment, while foreign participation declines.
This comes against the backdrop of China’s continued structural challenges, with data from the National Bureau of Statistics this week showing investment fell for the third straight month in November, and fixed-asset investment down 2.6 per cent year-on-year to November 30. The month also saw the slowest retail sales growth in three years, reflecting weak domestic spending and subdued household confidence.
For Southeast Asia, Tng said the region is expected to “find its bottom” in 2026, continuing to adjust after two years of contraction, while Australia and South Korea maintain steady capital recycling and corporate divestiture, though growth remains tied to global sentiment.
Asia to join GP-led secondaries trend
The firm also predicted that Asia’s nascent GP-led secondaries market will grow in 2026, joining Europe and the US where such structures are already well-established.
Amid the extended private markets exit drought, Tan explained that GP-led secondaries and other innovative fund structures have become some of the fastest-growing liquidity solutions globally.
He pointed to recent transactions and ecosystem developments in APAC as paving the way for further growth for these fund structures closer to home.
“Global secondaries players like Coller Capital and HarbourVest Partners have expanded regional footprints and established dedicated teams within Asia, facilitating the transmission of best practices and knowledge,” Tan said.
Overall, the firm concluded that with improving global liquidity and maturing local ecosystems, 2026 is likely to mark a shift from retrenchment to cautious reinvestment, setting the stage for future growth.
While acknowledging that renewed US tariff negotiations, shifts in the cash rate easing path, and other country-specific risks could alter the outlook, the firm remained confident in its view.
“Taken together, these dynamics point to a year of measured rebuilding for APAC private capital. The region is unlikely to deliver synchronised growth, but its diversity of capital sources and policy environments provide a foundation for stability,” Tan and Tng wrote.
