- Commercial Real Estate (39%) and Financial Services (35%) sectors in Asia are most likely to experience distress in 2025.
- Greater China is expected to see the most financial restructuring in the next 12 months (33%), followed by Singapore (22%) and Japan (22%).
- 81% of professionals foresee economic growth in Asia in the next 12 months
Hong Kong (June 19, 2025) – As geopolitical tensions continue to shape the economic landscape, the AlixPartners 2025 Turnaround and Restructuring Survey in Asia reveals Asian markets' optimism against global market volatility and uncertainty. This divergence underscores Asia's unique position amid macroeconomic headwinds, distinct sector-specific challenges, and the growing private credit market, as well as the evolving restructuring frameworks.
Geopolitical Disruptions to Drive Turnaround Activity in 2025 and Beyond
Asian restructuring markets are poised for significant activity in 2025, with 62% of respondents in Asia anticipating a rise in out-of-court restructurings and an equal proportion forecasting increased distressed M&A transactions as companies seek alternatives to formal insolvency proceedings. This trend is partly driven by mounting pressure from lenders, with 79% expecting stricter enforcement of covenants as persistent high interest rates erode debt-service capacities across the region.
92% of professionals in Asia believe geopolitical disruptions, including elections, governmental changes and conflicts, will directly lead to increased distressed situations.70% of respondents expect worsening global supply chain challenges over the coming year. This shift reflects the increasingly complex international landscape and its growing impact on business operations across Asia.
Lian Hoon Lim, Partner & Managing Director and Head of Asia Turnaround & Restructuring Services at AlixPartners Singapore, said: "The persistent volatility emanating from the United States – from trade policy shifts to changing geopolitical dynamics – has clouded the global economic outlook, putting organizations in limbo. This spillover is creating a systemic 'risk off' mentality across corporates and lenders in Asia. As traditional financing channels come short and disruptions continue, more companies are set to pursue strategic turnaround and transformation to fortify liquidity and recalibrate operations in this increasingly unpredictable landscape."
Greater China Tops Regional Restructuring Forecasts as CRE and Financial Services Anchor Sector Distress
Within the region, the respondents believe that Greater China is expected to see the most financial restructuring activity in the next 12 months (33%), followed by Singapore (22%) and Japan (22%).
Asian experts identify Commercial Real Estate (39%) and Financial Services (35%) as the sectors in Asia that are most likely to face significant distress in 2025, followed by Retail (25%), Manufacturing (24%), Consumer Goods (24%) and Automotive (23%).
"In FY2025, the perfect storm has moved to Hong Kong SAR's property sector," said Una Ge, Partner & Managing Director at AlixPartners Hong Kong. "Unlike mainland China's pre-crisis unsecured lending spree, the majority of Hong Kong developers' debt is asset-backed. Banks now lead workouts (vs. bondholders in China real estate restructuring), offering forbearance to credible operators. But with ~20% vacancy rates in commercial assets, even prime collateral can't mask the exit risks."
"In Japan, we have seen increased demand for business transformation. The surge in foreign investment and cross-border M&A activity in recent years, compounded with macro headwinds and ongoing disruptions, means Japanese firms must strengthen their global competitiveness and operational capabilities," said Masashi Niwa, Partner & Managing Director at AlixPartners Japan.
Asia Defies Global Pessimism for Economic Growth and Capital Availability
Despite widespread economic uncertainty, Asia continues to demonstrate remarkable resilience with 81% of respondents forecasting continued economic growth in the region. This reflects the region's unique positioning within the global economy, even as geopolitical tensions and trade disruptions persist worldwide.
Asian respondents also demonstrated strong optimism about capital availability – 60% believe the availability of capital will increase in relation to the previous year, up from 49% in the 2024 survey. Notably, 64% believe such from private credit will increase, as rising interest rates and market volatility drive companies' needs for diverse financing means and push investors towards alternative assets.
"Asian lenders are navigating a delicate balance between risk mitigation and opportunity capture. Our survey shows that 63% of experts expect financial/credit terms to be more restrictive through 2025, up 11 percentage points from 2024," said Matt Hinds, Partner & Managing Director at AlixPartners Singapore. "While traditional banks exercise caution, private credit providers are stepping into the voids to deploy fresh capital with meaningful profit improvement. The optimism about capital availability in Asia reflects the region's continued appeal to investors seeking diversification and growth opportunities."
Liquidity, Debt, and Tech Investment Top Challenges for Turnarounds in Asia
Asian restructuring professionals face a complex triad of challenges when navigating corporate distress, identifying liquidity and capital sufficiency (46%) and debt management complexities (46%)as paramount concerns.
"Companies across many sectors in Asia are facing a unique set of challenges including heightened geopolitical tensions, a climate of extreme uncertainty and the ongoing trade-war. These demand close monitoring and management of liquidity, implementation of operational restructuring initiatives and consideration of potential financial restructuring options to create sustainable pathways in current market conditions," said Patrick Bance, Partner & Managing Director at AlixPartners Singapore. "In addition, we're beginning to see an increased recognition that the application of new technology can provide companies with opportunities to drive growth, reduce costs and differentiate themselves from competitors. Businesses embracing technology are well positioned to navigate the current uncertainty and emerge stronger."
Methodology:
Research for the Asia Turnaround and Restructuring survey was conducted between late April and early May in 2025. Respondents comprised 200 hedge fund/private equity, investment bankers, consulting, financial advisors, involved in corporate workouts representing more than 20 major industries in Asian markets. Full report available upon request.