Although almost half of Asian institutional investors anticipate a significant increase in private debt allocations over the next three years, according to a 2025 Coalition Greenwich study, expectations of growth in the asset class have declined substantially year-on-year.
Of Asia ex-Japan institutional investors polled by Coalition Greenwich, nearly half (47%) expect allocations to the asset class to “significantly increase”. Last year, this figure was 70%; in 2023, it was 65%.
Alternative investment allocation across Asia ex-Japan has been increasing fairly steadily since 2021, growing by one percentage point per year to reach 17% of total assets in 2024. In 2025, this dipped to 16% – with 3.6% of total assets being allocated to private debt.
Predictions of private equity allocation growth, while lower than private debt, have grown since 2023 – with net expectations going from 27% to 18% in 2024 and 29% in the 2025 study.
“The APAC region has witnessed a significant, almost cyclonic, surge in private credit activity over the past decade, driven by evolving market dynamics, regulatory reforms, unmet capital demands coupled with localisation and control of available credit with banks (with similar appetite and funding limitations) and the growing appetite of institutional investors for alternative assets,” legal firm Chambers and Partners stated in its Private Credit 2026 report.
The report highlighted India as a particular region of interest, with estimated private credit assets under management going from US$700 million in 2010 to US$17.8 billion in 2023.
“Australia continues to lead in terms of market maturity and deal activity, while Vietnam and Thailand (amongst other APAC jurisdictions) offer significant growth potential,” it concluded.
The study also identified manager selection as the third most prominent issue for institutional investors, jumping from joint fifth place last year. In 2025, 37% of respondents selected the option as a key priority.
All institutional investors polled in Asia ex-Japan, along with the UK, consider “timely and clear communication around capital calls and distributions” as “extremely important” services for managers to provide in the private markets space. Equally important to Asia ex-Japan respondents was the quality and depth of reporting. Investors in the region were the most desirous of this service globally, followed by the UK and Continental Europe (91% of investors rating the service as “extremely important”).
©Markets Media Europe 2025
