Venture capital leads Apac private-market returns in Q2: MSCI
[SINGAPORE] Venture capital (VC) led the Asia-Pacific (Apac) private-market returns in the second quarter of 2026, even as infrastructure outperformed its global peers, according to index provider MSCI.
Apac VC returned 6.7 per cent in Q2, making it the region’s best-performing private-capital strategy in MSCI’s quarterly snapshot. The return was a jump from 3.7 per cent in the first quarter.
The performance for Q2 was nevertheless below the 12.7 per cent return for VC globally and North America’s 14.5 per cent, but ahead of Europe’s 3.4 per cent.
Late-stage startups have been driving VC returns in Apac, with the artificial intelligence sector fuelling returns, said Courtney Scharff, head of private capital indexes and taxonomies at MSCI.
“Apac has actually had two really strong consecutive quarters in late-stage venture capital, which is a really good sign. That’s what’s driving it from a sector performance perspective,” she told The Business Times.
The broader MSCI Apac Private Equity Closed-End Fund Index returned 3.4 per cent in Q2, up from 1.7 per cent in the previous quarter.
VC aside, buyout funds returned 2.2 per cent, and expansion capital posted a negative return of 1.9 per cent.
Infrastructure outperforms
Infrastructure was another area of strength for returns in Apac, with 2.7 per cent returns in Q2 2026, slightly edging out infrastructure global returns of 2.5 per cent.
The returns for infrastructure in Apac in the last 12 months was 12.8 per cent, higher than North America’s 11.7 per cent and Europe’s 1.9 per cent.
Apac has had four consecutive quarters of positive infrastructure returns, compared to Europe’s one negative quarter and two quarters at close to zero.
This asset class is evolving right now, said Scharff. Beyond traditional assets like railroad, utilities and ports, infrastructure now includes AI data centres as well as social infrastructure such as medical facilities and schools.
“Not only are you seeking a return that is beneficial to your portfolio, but you’re also investing into infrastructure that benefits the community around you, which I think is a unique position that infrastructure offers,” she added.
In Apac, while some of the returns in Q2 2026 for infrastructure was driven by data centres, traditional infrastructure investments such as port or transportation enhancements also played a role. Such investments have been historically linked to steady returns for investors.
Investors in Apac are getting that stable base of returns from such investments, even as they add on returns from high-growth areas such as data centres, said Scharff.
Real estate muted, Apac private credit holds up
Real estate remained muted in Apac and globally. In Q2 2026, real estate delivered 1 per cent in returns in Apac and 0.2 per cent globally. In the last 12 months, global returns from real estate were nearly flat, at 0.1 per cent.
In Apac, the returns on real estate in the last 12 months were also muted, recording a 1.2 per cent return.
This is in contrast to global real estate debt, which has returned 4.7 per cent in the same 12-month period. MSCI does not have data on real estate debt returns for Apac.
“I think that we’re seeing a move of capital from real estate into infrastructure, which is providing returns and has been considered real estate-adjacent as an asset class,” said Scharff.
On the private credit front, Apac has performed relatively well. The MSCI Apac Private Credit Closed-End Fund index returned 1.9 per cent in Q2 2026, slightly edging out the MSCI Global Private Credit Closed-End Fund index at 1.7 per cent.
Apac private credit funds have not experienced the same redemption queue pressures that have plagued their North American counterparts, noted Scharff.
Private credit funds in North America faced investors’concerns on the impact of artificial intelligence on software companies, which made up a large proportion of portfolios. These investors’ subsequent attempts to redeem their holdings in such funds then created a liquidity crunch.
While North America has a rebound in performance to 1.9 per cent, there is still a lengthy redemption queue, she added.
“A lot of the private credit [in Apac] tends to be more collateral-backed, so there’s a bit more security and understanding of what’s being held in those particular funds, as opposed to the way funds are structured in the Americas.”
