Singapore leads Hong Kong in private markets allocation, but fewer investors are raising exposure

Singaporean asset owners allocated a larger portion of their portfolios to private markets compared to their Hong Kong counterparts, though more Hong Kong investors increased their exposure over the past year, according to Morningstar's 2026 Asset Owner Perspectives Survey. In Singapore, private markets made up 23.8% of portfolios, while 22% of Hong Kong portfolios were allocated to private markets.

Notably, 68.6% of Hong Kong asset owners raised exposure in the past 12 months, compared to 48.6% in Singapore. The survey indicates that diversification from public markets (56%) and higher expected returns (42%) were the primary drivers for asset owners planning to increase private markets exposure. Among the Asia-Pacific respondents, diversification (60%) and resilient cash flows (31%) were most emphasized, whereas European investors prioritized higher expected returns (46%) and supportive government policies (19%).

Liquidity concerns were the most significant barrier to higher allocations, reported by 63% of global asset owners, with Asia-Pacific investors citing limited data availability (33%), return concerns (32%), and macro geopolitical issues (22%). Despite the growing interest in private markets, a smaller share of asset owners in Singapore and Hong Kong reported that ESG considerations had become more material in their investment decisions compared to the previous year.