Global LP interest in allocating to Asia Pacific remains strong but the pace at which that interest translates into capital deployment continues to be gradual, said a senior executive at global private markets firm HarbourVest Partners.
Portfolios today are relatively overweight on the Americas and underweight on APAC. From here, any regional recalibration is likely to be tactical. Investors are weighing how much exposure to add in Europe and whether now is the right time to increase allocations to Asia.
“For Asia,” said Kelvin Yap, Managing Director, Singapore HarbourVest, “the question is timing, not whether to invest”.
“There’s clearly a lot of tracking being done, but eventually investors need to act. It’s never immediate, and you can see some lumpiness in quarterly data. When we look at the numbers, there’s underlying deal activity and fundraising activity. Dry powder in Asia has been declining because investing has outpaced fundraising. I’m confident we’ll start to see fundraising pick up this year. The bigger question is how much, and how that compares historically. Allocations to Asia are really the micro-level signal of broader investor intent,” added Yap.
This cautious deployment backdrop sits alongside a region that posted relatively strong macro and investment activity.
In its 2026 Market Outlook, HarbourVest highlighted that Asia Pacific’s diverse markets continued to make a significant contribution to global growth through 2025, with the region’s GDP growth forecasts for the year up by the end of Q3 to 4.5% (from 3.9%), and outpacing the global GDP growth forecast of 3.2%.
Investment activity across the region has stabilised since 2023, with year-to-date Q3 2025 activity reaching $75 billion, a 26% year-over-year increase despite ongoing global macro volatility. And the report highlighted India and Japan emerging as regional powerhouses.
“Dry powder in Asia has been declining because investing has outpaced fundraising. I’m confident we’ll start to see fundraising pick up this year.”
Expert managers
Underlying economic growth in countries like India is creating significant private equity opportunities, according to a HarbourVest executive.
While execution remains challenging, strong management teams tend to drive the best-performing companies. And private equity, Yap said, focuses on identifying these teams, owners and shareholders who are positioned to capture a disproportionate share of growth.
Taken together, the combination of market risks and structural growth underscores the importance of careful fund selection.
According to Yap, successful investing requires assessing the capability, motivation and alignment of GP teams—alongside structural considerations—and maintaining long-term engagement to track performance and evolving opportunities.
Still, public market flows provide insight into investor preferences, as they indicate where capital is being deployed. Here capital can be deployed and exited quickly.
Public market flows, observed Yap, also highlight geographic interest. Significant capital is flowing into India, Japan, China, and Korea. India, in particular, is notable: domestic flows, including systematic investment plans (SIPs), are driving market activity.
Where the market was previously dominated by international investors, billions of dollars now enter the domestic market each month, supporting confidence and growth.
Translating this LP curiosity and public market momentum into actual private market investments, however, requires experienced managers. In a climate shaped by geopolitics, trade tensions, and tariffs, the ability to navigate complexity, identify the right opportunities, and deploy capital effectively becomes critical, Yap emphasised.
This expertise is reflected in HarbourVest’s own activity.
APAC growth drivers
“India and Japan are driving the majority of the growth in HarbourVest’s APAC business, with activity levels in both markets significantly higher than three years ago,” said Yap.
While the firm maintains healthy exposure to Australasia, Korea, China, and Southeast Asia, “the emphasis is on markets where activity is increasing relative to the past,” he added.
“India and Japan are driving the majority of the growth in HarbourVest’s APAC business.”
In India, he pointed out that the activity has increased meaningfully across all three strategies—primary fund investments, secondaries, and co-investments—reflecting what he described as a healthy market with actionable opportunities across the spectrum.
Japan, by contrast, presents a different profile. “For us, Japan is a strong market for fund investing and a solid market for co-investments, but a much lighter market for secondaries,” said Yap, adding that this reflects market structure, as Japanese exposures are traded less frequently, resulting in fewer actionable secondary opportunities.
Tactically, Japan has become increasingly attractive due to supportive regulatory changes, particularly around corporate governance and capital efficiency, which the government has been encouraging.
These reforms have gained momentum and helped drive new opportunities in the market. In addition, a long-discussed demographic factor is becoming more pronounced: succession planning is increasingly difficult, ownership transitions are harder, and companies face labour constraints. All of these dynamics, according to Yap, is what plays to the strengths of private equity as an active owner and manager of businesses.
Capital moves
When asked whether there are particular market inefficiencies that can be captured in both regions, Yap pointed to co-investments as a clear example.
“I specialise in co-investments, a strategy I’ve worked on for 20 years at HarbourVest. Looking bottom-up at where opportunities are coming from also highlights the structural drivers behind these markets,” he said.
Core co-investment opportunities, he explained, tend to arise from two types of situations. The first is a very high-growth market.
Rapidly expanding companies often outgrow the cheque sizes of traditional funds. In India, for example, although fund sizes are increasing, the opportunity set is growing even faster. Companies now require larger capital injections than the funds might typically allow, which creates attractive co-investment opportunities.
Japan is experiencing a similar shift.
Historically, the market was lighter on co-investments due to culturally ingrained strategies and a stable, low-growth environment. Multiples and operating performance were moderate, meaning fund size increases could capture most opportunities.
But as Japanese companies expand, particularly those with export potential, they often require additional capital, creating co-investment opportunities comparable to those in India—even if local fund sizes rise only moderately in US dollar terms, explained the executive.
The second structural element relates to geopolitics.
“Allocators increasingly consider potential risks, not just returns. For instance, if a government or governing board decides, for instance, to de-emphasise Asia in its strategy, it can prompt quick portfolio adjustments by that allocator. In such situations, HarbourVest is able to take on large secondary ticket sizes and participate in the region’s largest secondary deals. Our scale and reputation make us a go-to partner for complex transactions in Asia,” explained Yap.
HarbourVest, alongside LGT Capital Partners and Pantheon Ventures, anchored ChrysCapital‘s $700 million continuation fund to hold onto its stake in the National Stock Exchange (NSE) in 2024. In 2025, HarbourVest Partners, LGT Capital Partners, TPG NewQuest, and Hamilton Lane came together to co-lead India’s Multiples Alternate Asset Management‘s $430 million continuation fund, which acquired interests in three fast-growing private companies from Multiples Fund II.
HarbourVest had $146.7 billion in AUM as of Oct 1, 2025.
