Institutional investors are becoming more constructive on Asia-Pacific private markets, with 74% planning to increase or maintain their regional allocations over the next 12-24 months. However, capital remains concentrated in established markets and large fund managers, according to a report by Campbell Lutyens.
Only 5% of the 181 limited partners surveyed planned to reduce their Asia-Pacific allocations, the private capital advisory firm said in its Asia Pacific Private Markets Report 2026. The improving sentiment comes as regional private equity fundraising is on track to record its first year-on-year increase since 2021.
The recovery has so far been driven by a handful of large pan-Asian funds. Three vehicles, managed by EQT, Blackstone and Bain Capital, collectively raised about $40 billion and accounted for roughly 77% of the $50.9 billion raised for Asia-Pacific private equity strategies in the first half of 2026.
The concentration underscores the fundraising advantage enjoyed by established global platforms, while mid-market and specialist managers face a more difficult environment. Campbell Lutyens said 2027 would be a key test of whether the recovery broadens beyond the largest funds.
Australia leads returns
Australia and New Zealand are attracting investor interest on the back of strong private equity returns. Funds from the region generated a median net internal rate of return of 15% for the 2015 to 2022 vintages, outperforming Europe at 13.8%, North America at 13.5% and Asia at 12.9%.
Some 78% of surveyed LPs were monitoring Australia and New Zealand for potential commitments, according to the report. Investors are drawn to the region’s established institutions, relatively resilient services-led economy and structural growth opportunities.
The fundraising outlook is nevertheless becoming more competitive. Several established Australian mid-market private equity firms are raising new funds or expected to return to market in 2026 and 2027, potentially stretching the capacity of a relatively concentrated LP base.
Investors are scrutinising whether managers can maintain investment discipline as fund sizes grow, as well as examining team stability, succession planning and the ability to source deals beyond competitive auctions.
Japan tailwinds
Japan is another leading destination for institutional capital, with 82% of surveyed LPs monitoring the market for potential commitments.
Japan-focused private equity funds took an average of 11.3 months to raise in 2025, compared with a global median of 18.5 months. Japanese funds also recorded the highest pooled distribution-to-paid-in capital ratio among the major markets covered in the report, at 1.27 times, indicating a stronger record of returning capital to investors.
Corporate governance reforms are supporting take-private deals and corporate carve-outs, while business succession is creating opportunities for buyout firms. More than 51% of Japan’s approximately 3 million small and medium-sized enterprises were estimated to lack a successor in 2025, the report said.
Competition for access remains a constraint, with some established managers oversubscribed. Campbell Lutyens said some LPs were, therefore, looking beyond large-cap funds towards specialist and emerging mid-market managers.
