Global investors, particularly those in Asia-Pacific ( APAC ), have shown a greater appetite for alternative investments in the face of macroeconomic uncertainties and geopolitical concerns. In particular, limited partners ( LPs ) are planning to increase allocations to private credit and private equity secondaries over the next 12 months, according to a new report.

Asia-Pacific LPs demonstrated the strongest interest in alternative investments, with 67% planning to expand their overall allocations. The allure of private credit is mainly due to its lower correlation with the broader economy, and as such, it offers portfolio diversification and attractive risk-return profiles. Compared to private equity, the asset class also exhibits lower volatility, Coller Capital says in the report.

Globally, nearly half ( 45% ) of LPs plan to increase their allocation to private credit in the next 12 months, up from 37% six months ago. In Asia-Pacific, the proportion is higher at 50%.

Secondaries transaction volume reached US$160 billion in 2024, and continues to show signs of strong growth. More than a third ( 37% ) of global LPs plan to increase their allocation to secondaries, up from 29% in December 2024. The research also shows that 64% of LPs in Asia-Pacific intend to ramp up their exposure to secondaries, up from 42% six months ago.

However, interest in the primary private equity market has cooled. Only 28% of global LPs expect to increase their allocation to the segment, a decline from 34% last December. Still, just one in ten plan to reduce their allocation, according to the report.

There is growing interest in evergreen funds. Among APAC LPs, 42% plan to begin evaluating or investing in evergreen funds focused on private equity, while 58% are targeting private credit.

Geopolitical instability and trade tensions have created a more uncertain investment environment. This is particularly pronounced in Asia-Pacific, where 64% of respondents place greater emphasis on geopolitical risk. This aligns with findings that eight in ten ( 82% ) LPs in the region view geopolitical factors as a significant risk to returns over the next two to three years.

“Despite an uncertain geopolitical landscape, APAC investors are showing growing conviction in private markets, increasing their allocations to secondaries and private credit. They are also actively exploring emerging opportunities such as evergreen structures, which reflects their adaptability and long-term optimism in the region,” says Peter Kim, partner and head of Asia and RMB at Coller Capital.