- APAC private equity fundraising is off multi-year lows and is expected to improve in 2026, led by India and Japan with a modest China rebound.
- GP-stake sales are set to surge, with 90% of APAC GPs planning a sell-down within 24 months and consolidation accelerating.
- China PE is stabilizing but investor capital is concentrating in larger tech/AI-focused managers as exits and fundraising remain tougher for smaller funds.
- Regulatory easing and strong HNWI demand are expanding insurance-wrapped products (notably IUL) as a new channel for private markets distribution.
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Private Equity in Asia-Pacific enters 2026 following a prolonged fundraising winter, but a range of leading indicators suggests momentum is building. Specifically, investor focus is shifting toward manager consolidation opportunities, the revival of China in certain sectors, and innovation in wealth management via insurance wrappers.
1. GP stakes and consolidation accelerating. The Dechert 2026 Global PE Outlook reports that 90% of Asia-Pacific GPs plan to sell a stake in the next 24 months, compared to around 15% a year ago; about 6% are willing to sell majority positions. This reflects both the aging of established firms (e.g., in Australia and Japan) and a widening gap for LPs seeking exposure to credible GP brands via equity rather than fund commitments. Firms like Ares and EQT have already set precedents via acquisitions in Southeast Asia and East Asia. Financial buyers, insurance companies, and larger asset managers are increasingly entering the GP stakes and consolidating markets, particularly in developed APAC economies.
2. China’s partial rebound, with caveats. After accounting for only ~1% of global PE fundraising in 2025 (versus ~13% in 2016), China is seeing renewed activity. Notable closings include Source Code raising $600 million; Monolith and CASSTAR among others raising funds; Hillhouse targeting a $7 billion vehicle. However, the downturn has exposed weaker managers, led to longer fundraising cycles, and forced greater scrutiny on valuation. Exit pathways remain constrained, particularly for dollar-denominated funds.
3. Insurance products as wealth distribution vehicles for private markets. In Hong Kong and across Asia, regulatory easing (as in March 2025) has permitted insurers to bring to market new IUL or indexed life offerings aimed at professional and HNW clients. Early entrants include Sun Life, FWD, Transamerica, HSBC and YF Life. Key features include upside participation via index performance, downside floors, flexible terms, and liquidity options. This trend presents a growing, scalable channel for GPs to tap HNWI capital, but also raises regulatory, risk and suitability challenges.
4. Fundraising outlook and the macro headwinds. Asia-focused PE fundraising dropped sharply in 2024 to ~$64 billion — the lowest since 2012 — with a further decline in China-focused funds. Private credit in the region likewise fell to an eight-year low. However, signs of recovery in sectors like healthcare, AI, and in markets like India and Japan, combined with improved exit markets (e.g., IPOs in Hong Kong), suggest 2026 could bring positive inflection, though full normalization is unlikely.
Strategic implications:
- GPs and asset managers should evaluate their own exit and succession planning: selling GP stakes can provide liquidity, help with talent or brand continuity, and position for consolidation.
- LPs seeking Asia exposure need sharper due diligence: manager track record, domain focus (tech, AI, healthcare), exit structures (currency, IPO access), regulatory risk (especially in China) will matter more.
- Insurance companies and wealth managers who can structure compliant, risk-aware IUL/private markets products may unlock a new capital source, but will need strong governance, product transparency and client suitability frameworks.
- For GPs in China or those looking to invest there: lean into high-growth verticals (e.g., AI, digital, healthcare), prepare for extended fundraising cycles, and plan for exits under constraint.
Open questions:
- How much capital is permanently lost (never returns to China) versus simply reallocated? Will China recover to >2016 share of global PE capital?
- What valuations will be acceptable in 2026, especially for GP stakes? Are LPs comfortable acquiring legacy or less performant GP businesses?
- How stable is the demand for insurance-wrapped wealth strategies? Can regulatory adjustments derail or limit growth?
- How will exit environment evolve under global rate pressure, geopolitical tension, and regulatory tightening?
Supporting Notes
- Dechert’s 2026 Global Private Equity Outlook reports that 90 % of Asia-Pacific GPs plan to sell a GP stake in the next 24 months, up from just ~15 % the year before; around 6 % are open to selling majority positions.
- China in 2025 accounted for ~1 % of global PE fundraising volumes, compared to ~13 % in 2016; yet funds such as Source Code, Monolith, Vision Knight Capital, and CASSTAR have recently closed large funds in renminbi or dollars, often with heavy tech/AI focus.
- Hong Kong regulators in March 2025 clarified rules for IUL products, allowing insurers to offer them to professional investors; by mid-2025, at least five major insurers had launched IUL offerings targeting HNWIs, including Sun Life, FWD, HSBC, Transamerica, and YF Life, all with features like index participation, downside protection, and flexible premiums.
- Asia-focused PE fundraising plunged to approx. US$64 billion in 2024, the lowest since 2012; private credit fundraising for Asia Pacific dropped 34 % in 2024 to US$5.4 billion, lowest since 2016.
- Hillhouse Investment is targeting a US$7 billion Asia-focused fund as of November 2025, signalling revival among large, established managers.
- Amid China’s slowdown, HNWIs are buying insurance policies in Hong Kong: in HK’s first half of 2025, annualised new insurance premiums rose 39 % year-over-year to approximately HK$99 billion (≈US$12.7 billion), with many policies denominated in HKD or USD and a large share purchased by mainland clients.