Institutional investor sentiment for Asia is improving on the back of structural shifts around returns and scalability, investors told the AVCJ Private Equity Forum 2025.

Greg Jania, global co-head of private equity at APG Asset Management, highlighted how recent Asia funds of global players such as Bain Capital, EQT, and Blackstone funds have outperformed their European and US buyout counterparts.

“Those funds tend to be a lot smaller generally than their Europe or US funds. It does show that there’s money to be made here in the middle market,” he said. “I think it gives us a lot of thoughts that this market is ready for prime time, and there can be alpha from that.”

Institutional investors with large minimum cheque size requirements have struggled to find sufficiently scaled managers in emerging markets. APG will not invest in funds in Asia smaller than USD 1bn, but Jania said there are opportunities in the region for pension funds and other large institutions in middle-market strategies.

Josh Stern, a managing director for private investments at Robert Wood Johnson Foundation, pointed to Hong Kong’s IPO market rebound as a potential driver of increased investment activity in Asia. “It’s not necessarily a liquidity event – an IPO – but it does start the clock ticking,” he said.

According to Harj Shoan, global head of private equity funds for equities at Ontario Teachers’ Pension Plan (OTPP), Asia is showing signs of an evolving and maturing private equity playbook.

Japan, for example, is undergoing an evolution similar to what North America experienced two decades ago, with a wave of take-privates, succession planning, and carve-outs of undermanaged corporate subsidiaries creating deal flow.

“Why would you necessarily need to ascribe a risk premium to that if it is the playbook that has been used in North America for the last 20 years?” Shoan said.

Anders Strömblad, a senior adviser for Swedish pension fund AP2, added that early-stage venture in the region was showing promising signs in terms of innovation.

“We are 10m people living in Sweden. I heard yesterday there are 10m new engineers coming out from universities every year in China. That’s something to think about when we are allocating money,” he said.

Despite these developments, GP selection in Asia still requires additional legwork to get comfortable. APG’s Jania said this includes taking a closer look into a manager’s day-to-day operations such as its processes around operational due diligence and how it weighs reputational risk in investments.

“We try to make sure that the GPs that we want to back here have the foundation of strong operational set-ups, can handle what might come their way, and can handle a large investor like ourselves,” he said.