Asia-Pacific pension funds, insurers and wealth managers are lifting their exposure to European assets after years of favouring the United States and emerging Asia.
A December 2025 pulse survey of 300 professionals in Australia, Japan, Hong Kong and Singapore found that 76 per cent plan to raise European allocations during 2026, with three-quarters already holding more than 11 per cent of their portfolios on the continent.
Survey shows broad allocation shift
The Europe Rising study attributes the pivot to clearer monetary signals from the European Central Bank, cheaper equity valuations and record public spending on energy transition and re-industrialisation. Berlin alone has earmarked €500 billion (about C$730 billion) for infrastructure, defence and climate projects over the next decade.
“A confluence of factors has improved Europe’s attractiveness,” Daniel Morris, chief market strategist at BNP Paribas Asset Management, said. The survey shows Australia in the lead, with 87 per cent of respondents intending to boost European holdings, followed by Hong Kong on 83 per cent and Singapore on 80 per cent.
Portfolio managers cite diversification as the top motive. Forty-five per cent want to cut concentration risk, while 71 per cent expect European positions to deliver five to 14 per cent returns in 2026. Developed-market equities remain the preferred entry point, yet private markets are rising fast, especially infrastructure debt and renewables where policy support is strongest.
Debt fundraising accelerates on demand
Institutional appetite is also evident in capital flows. In July 2025, Macquarie Asset Management closed its first dedicated European Infrastructure Debt Fund with €1.2 billion and lifted related separately managed accounts to €3.5 billion (about C$5.1 billion) in total commitments.
“We are extremely proud to announce the close of our first European Infrastructure Debt Fund,” Tom van Rijsewijk, head of infrastructure and investment-grade private credit for EMEA at Macquarie, said, adding that market volatility has driven investors toward assets providing long-term stable returns. The fund is more than 80 per cent deployed across wind, solar, fibre and transport assets, signalling that shovel-ready projects can still absorb fresh debt.
Macquarie’s raise follows similar moves by global managers that see regulatory reforms, including Solvency II adjustments and streamlined permitting rules, unlocking larger pools of Asian insurance capital. Industry data suggest that European infrastructure funds gathered more than US$25 billion from Asia-Pacific investors in 2025, a 40 per cent jump from the prior year.
Public policy keeps momentum
Europe’s medium-term targets underpin the shift. Brussels wants at least 45 per cent of energy from renewables by 2030, up from 23 per cent in 2022, and plans to mobilise €210 billion through its REPowerEU programme. National funding vehicles, such as France’s green bond platform and Italy’s recovery plan, add fiscal heft. With inflation easing and the euro stabilising near its five-year average against Asian currencies, hedging costs have fallen, narrowing the gap with North American alternatives.
Risks remain, notably execution delays and fragmented grid approvals, but current deal pipelines suggest Europe can absorb the extra capital. If the February 2026 onshore wind auction in Germany and a summer round of broadband concessions in Spain run smoothly, analysts expect Asia-Pacific allocations to Europe to rise above 15 per cent of average institutional portfolios by 2027. For now, survey responses and fund closes show the region is firmly back in the sights of Asia-Pacific investors seeking both diversification and stable, inflation-linked cash flows.