Private equity managers in Asia-Pacific are optimistic about deal outlook, expecting better returns and fewer geopolitical risks than their global counterparts, despite softer deal activity. Healthcare and technology sectors lead investments, with interest in flexible structures like earnouts. Deal volumes are expected to increase in 2026.

A survey of 100 senior-level executives across regions in July found that only 30% of Asia-Pacific managers see geopolitical conflicts as a top risk, compared to 49% globally. Populations in China and Japan aging are driving activity in life sciences. Flexible structures like earnouts are favored by Asia-Pacific managers.

Weak economic growth is seen as the biggest headwind to the deal environment by Asian executives, with deal value falling in Asia-Pacific by 3.8% in the first three quarters of this year. China’s private equity market is facing regulatory uncertainty and property sector weakness, affecting deal flow.

Despite challenges, private equity activity in China is rebounding, driven by domestic M&A transactions and companies reshaping portfolios. A gradual thaw is expected in selected sectors like technology, data, and healthcare. Deal volumes are set to increase in 2026, with a focus on flexible structures.

Read more at Yahoo Finance: Healthcare and tech to drive Asia-Pacific private equity deals amid slower growth: survey