India leads APAC opportunity ranking as Singapore sets benchmark for low friction

India ranked first on the Opportunity Index with a score of 0.78, well above the APAC benchmark of 0.64. The result reflects strong investor confidence in India’s scale, depth of investable companies, growth outlook and long-term value creation potential.

Japan and Mainland China followed at 0.72 each, ahead of Singapore at 0.71 and South Korea at 0.70. These markets also scored above the regional benchmark, pointing to continued interest in APAC’s larger, more established or strategically important markets.

The drivers differ across markets. Japan and South Korea are benefiting from corporate transformation, governance reform and operational value creation. Mainland China remains too significant to overlook because of its innovation depth, despite geopolitical complexity. Singapore continues to stand out as a regional capital, fund management and operating hub.

The PE and VC rankings also show where investor priorities diverge. India retains the top position across both strategies. Vietnam ranks second among PE respondents, reflecting stronger interest in its growth, scale-up and value creation potential. Mainland China ranks second among VC respondents, pointing to continued interest in its technology and innovation ecosystem.

Singapore recorded the lowest friction score in the report at 0.32, followed by Hong Kong (0.33), New Zealand (0.35) and Australia (0.36). These markets are seen as easier to navigate because of stronger regulatory clarity, governance standards, market infrastructure and institutional depth.

At the other end of the ranking, Cambodia, Indonesia, Vietnam and the Philippines recorded some of the highest friction scores. These markets remain investable, but respondents pointed to greater challenges around governance, regulatory uncertainty, exit routes and macroeconomic volatility.

“The APAC private capital story is no longer just about where growth is. It is about where managers can actually convert growth into returns. India is the region’s clearest full-stack opportunity, while China remains too significant to overlook. Japan and South Korea are being re-rated on corporate transformation. Further south, Southeast Asia is splitting between conviction and execution-heavy markets. Allocating to APAC as a single thesis is over – this is now a market-by-market, strategy-by-strategy discipline,”said David Anderson, Executive Vice President, APAC, Vistra Fund Solutions.

Bringing these two dimensions together, the APAC PE/VC Opportunity-Friction Quadrant groups markets into four archetypes based on the relationship between investment opportunity and execution friction.

• Efficient opportunity markets: Singapore, Australia, Japan, South Korea and India. These markets combine above-benchmark opportunity with below-benchmark friction, offering clearer routes from investment to value creation and exit.
• High-conviction markets: Mainland China, Malaysia and Vietnam. These markets offer above-benchmark opportunity, but also come with higher execution challenges. They may reward investors with stronger local networks, operating capability and differentiated access.
• Calibrated deployment markets: Hong Kong, New Zealand and Taiwan. These markets are comparatively easier to navigate, but offer a narrower or more selective opportunity set.
• Precision-entry markets: Thailand, the Philippines, Indonesia and Cambodia. These markets require more careful sector selection, stronger local execution and clearer exit planning from the outset.

The Friction Index also shows that private capital managers are taking longer to raise new funds. Only 19.3% of respondents completed fundraising for their latest fund within 12 months, suggesting that large institutional backers such as pension funds, sovereign wealth funds and family offices have become more cautious.

These backers, known in the industry as limited partners or LPs, are also becoming more selective about reinvesting with the same managers. The report finds that 40% of respondents had fewer than 40% of their previous LPs reinvest in their latest fund, while nearly one in four reported reinvestment rates of 20% or less.

This matters because private capital managers typically rely on a mix of existing and new investors when raising a new fund. Lower reinvestment rates can make fundraising more difficult, especially when exits are slower and fund managers have returned less capital to investors.

“APAC remains a core PE and VC allocation region, but the next cycle will be defined by execution discipline. Geopolitical risk, macro volatility and tighter exit conditions are forcing managers to be more precise about where they deploy, how they build value and how they return capital. The strongest GPs will be those that can underwrite friction upfront, manage it through the holding period and convert market complexity into liquidity and DPI,” said Andi Haswidi, Head of Research, DealStreetAsia.

Despite these challenges, most fund managers are adapting rather than pulling back. The Friction Index identifies three dominant trade-off paths that fund managers accept when operating in markets with sustained high friction: 

• Adjust operating models (38.8%) — The most common response. Managers strengthen local presence, outsource compliance or adopt partnership-led market entry rather than attempting to replicate home-market infrastructure.
• Bring governance earlier (16.5%) — A growing minority front-load governance involvement into the investment process, treating regulatory and execution risk as underwriting variables rather than post-deal surprises.
• Rationalise exposure (16.5%) — Where the operational burden no longer justifies the return potential, managers exit, pause or restructure underperforming activities — a signal that not all friction is worth absorbing.

Together, these responses point to a market where operational readiness is becoming as important as deal selection. Those managers that can navigate regulation, reporting, cross-border structures and exit planning more effectively are likely to be better positioned in the next investment cycle.

Download the full report: The complete Vistra Friction Index: Turning Friction into Capital Flow (APAC PE/VC Edition 2026), is available for download here.

About the report

Vistra Friction Index: Turning Friction into Capital Flow (APAC PE/VC Edition 2026) is based on a proprietary survey of active private capital fund managers with investment mandates across Asia-Pacific. Conducted in April 2026, the study was developed by DealStreetAsia in partnership with Vistra Fund Solutions. The analysis is based on 105 eligible responses from private capital fund managers across private equity, venture capital, growth equity, private credit and adjacent strategies. Respondents hold investment-focused roles with decision-making authority, including Founder, Co-founder, Managing Director, Managing Partner, Partner and Investment Director.

Vistra is a leading provider of essential business services to help companies and private capital funds grow across the entire business and investment lifecycle. 

Here at Vistra, our purpose is progress. As a close ally to our clients, our role is to remove the friction that comes from the complexity of global business. We partner with companies and private capital managers along the corporate and private capital lifecycle. From global payroll & HR to tax & accounting, and from legal entity management to regulatory compliance, we quietly fix the operational and administrative frustrations that hamper business growth. With over 9,000 experts in more than 50 markets, we can accelerate progress, improve processes, and reduce risk, wherever your ambition takes you. 

For more information about Vistra, visit vistra.com

DealStreetAsia, part of the Nikkei Group, is a Singapore-headquartered media and intelligence platform focused on Asia’s private capital markets. Its coverage spans private equity, venture capital, M&A, IPOs and the startup economy, combining newsroom reporting with proprietary data, research and market analysis. Through DATA VANTAGE, its research and analytics arm, DealStreetAsia provides insight into venture-backed companies, funding trends, valuations and financial performance across Southeast Asia. Beyond its editorial and data products, DealStreetAsia also convenes the regional investment community through flagship events including the Asia PE-VC Summit in Singapore and the Private Equity Leadership Summit in Hong Kong.

Ellie King

[email protected]

Andi Haswidi
Head of Research, DealStreetAsia
E: [email protected]
P: +62811231431