In a sign of shifting investment priorities across Asia-Pacific, private wealth portfolios are set to more than double their exposure to alternatives to as much as 12 per cent in the coming years, according to J.P. Morgan Asset Management.
The firm’s eighth annual Global Alternatives Outlook outlines its highest-conviction views for the next 12-18 months as private markets cement their role as a structural pillar of global finance.
APAC head of global strategic relationships and private wealth alternatives, James Burdis, said expanding access to alternative investments and simplifying solutions for private wealth clients is becoming increasingly important to close the allocation gap.
“By leveraging our global platform and taking a thoughtful, measured approach, we aim to deliver innovative solutions, such as evergreen solutions, that simplify the complex world of alternatives for private wealth investors in APAC.”
“As many leading companies are staying private for longer, the private markets are deep and diverse, and the opportunity for investors is immense,” global head of private markets Jed Laskowitz said.
The AI boom and broader macro shifts are creating powerful tailwinds across private markets, according to the outlook.
JPMAM points to a world where hyper-globalisation is fading, AI investment is accelerating, and the positive correlation between stocks and bonds continues to rise – intensifying the need for diversification through real assets and private market strategies.
“In this environment, private markets will play an increasingly important role as portfolio diversifiers through real assets, and a broader access point for investors to the drivers of this structural shift through private equity and private credit,” global head of alternatives solutions Anton Pil said.
Private equity enters 2026 with solid foundations for dealmaking – particularly in small and mid-market segments – as valuations and credit conditions normalise and a new innovation cycle, led by AI and healthcare, expands opportunity and supports exits.
“These businesses can be acquired at lower entry multiples and with less leverage, giving investors greater resources to drive value through operational improvements rather than financial engineering. They also tend to be family- or founder-owned, meaning professionalisation, efficiency gains and strategic expansion through M&A can have outsized impacts.”
The secondaries market has also broadened meaningfully, with LP-led deals still dominant but GP-led continuation vehicles giving managers the option to retain high-performing assets while providing liquidity.
“Secondaries are recognised as one of the most scalable and adaptable parts of private equity. After five years of transaction volumes above US$100 billion, global secondary activity hit US$160 billion in 2024 and is on track to exceed US$200 billion in 2025, meaning investors have more options than ever.”
A maturing private credit market – with growing secondaries – is also opening new avenues for investors. The sector reached US$1.7 trillion in global AUM at the start of 2025 and is projected to climb to US$3.5 trillion by 2029.
JPMAM warns that this rapid growth, while a marker of success, also brings risk. Early signs of stress – including liability management exercises and payment-in-kind arrangements – are emerging.
“Concerns about a potential bubble in private credit resurfaced in September 2025 when a handful of US borrowers defaulted on large debts, particularly in the auto sector. While alarming – drawing commentary from investors and other interested parties outside the domestic US market – these defaults appear to be issuer-specific rather than systemic, though they have refocused attention on credit quality, adequate pricing and diversification,” the report said.
Private credit dry powder stayed robust through 2025, reaching nearly US$500 billion. Public loan markets saw limited net new issuance, with early-2025 activity dominated by re-pricings and refinancings.
“Private markets have seen M&A green shoots, but uncertainty following tariff announcements in 2Q25 and the government shutdown in 4Q25 have impacted overall new-money volumes.”
Alternatives
Beyond private markets, the global asset manager highlights a commercial real estate sector entering a new recovery phase, supported by potential rate cuts and tight supply.
JPMAM said APAC’s office market stands apart, with demand staying strong across most developed markets. Office-based employment has grown steadily – aside from short-lived pandemic disruptions – and hybrid working remains less common across the region.
“Office supply is declining, particularly in Australia, Japan and Singapore, the report said. “In Australia, the office sector is poised for asset revaluation, supported by falling policy rates and improving market fundamentals. These conditions create attractive entry opportunities for prime, high-quality office assets.”
Timberland, meanwhile, continues to serve as a differentiated portfolio component, offering inflation protection, steady income, capital appreciation and diversification.
“Improved housing affordability remains a key driver of lumber demand, with interest rate movements supporting nascent residential construction recoveries across the US, Australia and New Zealand … Yet, risks remain as high property prices limit buyers in major cities, while labour shortages and rising costs delay housing starts and completions, worsening supply-demand imbalances.
“However, Australia’s status as a net lumber importer, unable to meet domestic demand, should continue to underpin long-term log pricing.
