Following the lowest level of private capital fundraising in 2023, APAC is set to see gradual improvement in the coming years, according to a Preqin report.
From end-2023 to 2029, private capital in Asia Pacific is forecasted to post a compound annual growth rate (CAGR) of 9.5 percent to reach $2.6 trillion in assets under management (AUM), according to a Preqin report entitled «Future of Alternatives 2029». This compares to the global growth of $29.2 trillion in AUM by 2029 compared to $16.8 trillion at the end of 2023.
After reaching its lowest level in 2023, fundraising is expected to gradually improve with a CAGR of 6.7 percent between 2023 and 2029. Private equity will remain the largest asset class in the region while venture capital is projected to experience the strongest growth (10.7 percent CAGR). Venture capital is also forecasted to generate the strongest returns at 16.3 percent, outperfoming other regions including North America (15.6 percent).
Market Interest
In terms of preferred markets, investors are shifting focus towards India within emerging markets where depth is quickly developing beyond venture capital deals and into larger private equity deals. And in developed markets, Japan and South Korea have been increasing their share of APAC deal flow, especially as the former is known for more stable returns now enhanced by favorable interest and exchange rates.
«While we have made mostly positive revisions to the APAC forecasts this year, our assumptions do not currently incorporate a strong rebound in the China market, even though this possibility should not be ruled out,» commented Angela Lai, VP, head of performance & valuations, research insights at Preqin.
«China remains a heavyweight in APAC’s private capital market, and a major comeback in its economy could present further upside to our regional forecasts, while a deterioration may warrant reviews to the downside.»
