Alternative investors are diversifying into Japan, India, and South Korea as China loses appeal for private equity, real estate, and venture capital. In Q2 2023, USD5bn of the USD14.8bn raised for private equity in Asia-Pacific was allocated to Japan, with USD6.9bn for diversified regional investments, according to Preqin. Infrastructure investment is recovering due to demand for renewable energy, 5G, and data centres, especially in India. However, overall alternative investment in the region was slow, hitting a decade low of USD22bn, impacted by China’s economic slowdown and geopolitical tensions. Deal activity is cautious, with Japan’s Government Pension Investment Fund allocating 5% to alternative assets. Recovery in fundraising is expected to be gradual, with diversification beyond China seen as positive.