Recent research highlights a significant shift in global investment focus as general partners (GPs) signal that they are turning their attention towards Asia. In a 2025 survey of GPs, the number planning to invest in the APAC region jumped 22 percentage points year-over-year to 30 per cent – a clear signal that Asia is becoming a strategic pillar in global alternatives portfolios.

The rising interest comes despite a backdrop of geopolitical uncertainty, but the story unfolding is not one of risk avoidance. Instead, the findings hint that it’s one of opportunity recalibration. GPs are recognising the region’s long-term potential and the returns that could come from investing in its innovation ecosystems and expanding middle class. 

As the private capital market enters its next phase of global deployment, APAC is emerging as an important opportunity in the alternatives playbook.

Asia Is climbing the priority ladder
The 2025 surge in Asia-focused investment strategies seems to mark a turning point in how GPs approach global diversification. While the region has long held promise, recent structural reforms, especially in Japan, and economic modernisation across Southeast Asia and India are creating more predictable environments.

There is growth potential across a broad range of industries, from regional financial hubs in Singapore and Hong Kong to digital banking in India, and AI innovation in South Korea. The growing middle class across China, southeast Asia, and south Asia is driving demand for consumer products, healthcare, and infrastructure. At the same time, new policies and regulatory modernisation are making deal structures more accessible and exits more viable.

The unique mix of early-stage innovation and economic maturity is positioning Asia-Pacific as a compelling diversification opportunity to Western markets that may potentially face saturation or economic slowdown.

Future returns may not be defined by tech unicorns
GPs seem to be thinking differently about where the next wave of returns will come from. It’s not just about tech unicorns.

Countries like Vietnam and Indonesia are fast becoming hubs for manufacturing as companies shift operations to reduce costs and access vast local natural resources. At the same time, many Asian countries are developing advanced technologies and capabilities in their secondary and tertiary industries as well, including electric vehicles, semiconductors, and AI companies. These are drawing attention from growth equity and venture investors.

Given the region’s large primary and secondary industries, many startups are concentrating on providing products and services to support and improve them. Sectors such as agriculture technology (“agritech”), microfinance, and digital banking are experiencing growth as these industries respond to local needs for more scalable, tech-enabled solutions.

Resilience strategies amid geopolitical risks
Despite its attractiveness, APAC remains a region where geopolitical and regulatory risks still weigh heavily. A significant percentage of GP survey respondents cited geopolitical conflicts (63 per cent) and global trade tensions (43 per cent) among the top five factors influencing their upcoming investment allocations. The trade war between the US and China is just one factor that’s top-of-mind for investors in the region. 

But GPs are responding with smarter, more resilient strategies. Investors are trying to help their portfolio companies diversify their production bases, explore new markets, and engage established international brands for partnerships. Traditional regional investors in Southeast Asia, for example, are extending their deal-sourcing to more “frontier” regions such as Africa.

They are also more likely to engage in co-investments and partnerships with other GPs to spread risk. Some venture capitalists are borrowing tactics from private equity – focusing more on profitable, later-stage businesses with clearer exit paths. Many GPs are also increasingly launching private credit strategies, another sign of risk-adjusted strategies that may offer more predictable yield in uncertain times.

Digital infrastructure is a key enabler
Asia’s digital transformation is one of the key enablers of its growing appeal to private market investors. As governments invest in digital infrastructure, Asia is becoming easier for GPs to manage multiple teams and offices across highly diverse markets.

This was evidenced by the number of GPs indicating a significant increase in their tech budgets. Just one year ago, half of GPs said they intended to increase their technology spend in 2024 – but that number jumped a full 23 points to 73 per cent of this year’s surveyed GPs.

As such, GPs are placing a premium on technology to operate efficiently and drive deal flow, turning to automated deal sourcing, data collection, extraction, translation and entry, generative AI-powered business intelligence summaries, and advanced network and relationship management. For firms managing multi-country portfolios, these capabilities are essential for competitiveness if they are to meet the expectations of global capital allocators while managing the region’s operational complexity.

Will Asia sustain its momentum?
Will the APAC allocation trend extend beyond 2025? The answer is complex. Many of the region’s largest GPs are launching new funds that are consistently over-subscribed, yet smaller or newer managers are struggling with fundraising. High-profile scandals, such as financial fraud at eFishery, have dampened optimism in some circles.

Ultimately, the Asia story in alternatives seems to be separating into those who are equipped to navigate its complexity and those who are not. Technology, local knowledge, and disciplined portfolio management will define who succeeds.

APAC is no longer the next frontier – it’s a current arena for global private capital. As the latest research shows, a growing number of GPs are betting on Asia not just as a growth market, but as a substantial part of their investment framework.

About the author
Benjamin Astono is sales leader at Dynamo Software, an end-to-end investment management platform built specifically for the alternatives ecosystem. There he drives General Partner (GP) business across Southeast Asia, India, Hong Kong, and South Korea.