Key Takeaways
- • Japan accounted for close to 30 per cent of APAC's total private equity deal and exit volume in 2025, according to Preqin's APAC Private Markets in 2026 report.
- • Preqin expects Japan's momentum to carry into 2026, with rising policy rates likely boosting private investment in public equity (PIPE) and take-private deals.
- • Nearly half of APAC-based investors identify Japan as a compelling market, ahead of Western Europe.
- • Private capital fundraising targeting APAC fell for a fourth consecutive year in 2025 to a decade-low of $94.3 billion, though Asia-regional funds accounted for over 70 per cent of capital raised in Q1 2026.
- • APAC AI VC deal value has held at roughly $20 billion annually over the past four years, with capital concentrated in Japan and South Korea.
Summary
Japan continues to stand out within Asia-Pacific's private equity landscape, with deal-making and exits remaining a relative bright spot, according to Preqin, the UK-headquartered alternative assets data provider acquired by BlackRock in 2025. In its APAC Private Markets in 2026 report, Preqin's Gerard Minjoot, who leads deals research within the firm's Private Markets Research team, said Japan accounted for close to 30 per cent of the region's total deal and exit volume in 2025. He attributed this to accommodative monetary policy, a favourable currency backdrop and improved alignment in exit valuations, and said the momentum is expected to carry into 2026, although transaction dynamics may shift as policy rates rise, likely increasing the relevance of PIPE and take-private deals.
The report says investor appetite remains firm, with nearly half of APAC-based investors identifying Japan as a compelling opportunity market, placing it ahead of Western Europe and reinforcing its role as a key regional deployment hub. By contrast, Minjoot said Greater China's private equity market remains largely domestically driven, with local capital filling gaps left by more cautious foreign investors. Deal activity in the region rebounded in 2025 and is likely to remain relatively strong in 2026, supported by investment in semiconductors and AI as part of government efforts to build domestic technological self-sufficiency.
Preqin's broader findings show APAC, which accounts for roughly 40 per cent of global GDP, remains underrepresented in private capital assets under management and fundraising. Private capital fundraising targeting the region declined for a fourth consecutive year in 2025, reaching a decade-low of $94.3 billion amid trade and regulatory tensions. Early signs of reorientation have emerged, with Asia-regional funds accounting for over 70 per cent of total private market capital raised in the region in Q1 2026, compared with 17 per cent in 2025.
In venture capital, AI-related deals accounted for just over a third of APAC VC deal volume and a quarter of deal value in 2025, while aggregate investment has held at around $20 billion over the past four years. Preqin expects smaller ticket sizes, stronger early-stage deal flow and more selective late-stage deployment, with regulatory, trade and technology constraints in China contributing to a fragmented landscape concentrated in Japan, South Korea and a limited set of scaled platforms.
In real estate, the report highlights that APAC-focused core and value-added fundraising has proven more resilient than opportunistic strategies, as international investors shift toward lower-risk and income-oriented assets. Preqin cited strong fundamentals in Japan and South Korea's capital office sectors and Australia's prime retail sector, and corporate disposals and REIT privatisations totalling at least $5.6 billion in the second half of 2025 expanded access to income-generating assets.
The report says investor appetite remains firm, with nearly half of APAC-based investors identifying Japan as a compelling opportunity market, placing it ahead of Western Europe and reinforcing its role as a key regional deployment hub. By contrast, Minjoot said Greater China's private equity market remains largely domestically driven, with local capital filling gaps left by more cautious foreign investors. Deal activity in the region rebounded in 2025 and is likely to remain relatively strong in 2026, supported by investment in semiconductors and AI as part of government efforts to build domestic technological self-sufficiency.
Preqin's broader findings show APAC, which accounts for roughly 40 per cent of global GDP, remains underrepresented in private capital assets under management and fundraising. Private capital fundraising targeting the region declined for a fourth consecutive year in 2025, reaching a decade-low of $94.3 billion amid trade and regulatory tensions. Early signs of reorientation have emerged, with Asia-regional funds accounting for over 70 per cent of total private market capital raised in the region in Q1 2026, compared with 17 per cent in 2025.
In venture capital, AI-related deals accounted for just over a third of APAC VC deal volume and a quarter of deal value in 2025, while aggregate investment has held at around $20 billion over the past four years. Preqin expects smaller ticket sizes, stronger early-stage deal flow and more selective late-stage deployment, with regulatory, trade and technology constraints in China contributing to a fragmented landscape concentrated in Japan, South Korea and a limited set of scaled platforms.
In real estate, the report highlights that APAC-focused core and value-added fundraising has proven more resilient than opportunistic strategies, as international investors shift toward lower-risk and income-oriented assets. Preqin cited strong fundamentals in Japan and South Korea's capital office sectors and Australia's prime retail sector, and corporate disposals and REIT privatisations totalling at least $5.6 billion in the second half of 2025 expanded access to income-generating assets.
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