North America may be a more dominant venture capital market but Asia is catching up and leading in terms of returns, figure show.

Asia's venture capital industry is no longer a small player on the investment stage but now controls $221 billion in assets under management as at the end of 2017, and Asia-focused funds lead other regions, such as North America, over how much money they make.

Funds concentrating on Asian assets have clocked up a median net internal rate of return of 13 per cent across all vintages, Preqin, the research firm tracking these alternative assets, said. ("Vintage" relates to when an investment was initiated.) That IRR performance compares with the 8.9 per cent result for North America and 10 per cent in Europe.

The growth rate has been rapid: the $221 billion figure for end-December, 2017 compares with $88 billion three years previously.

To put the Asian figures into perspective, Q3 2018 saw 3,894 venture capital-backed deals announced worth a total of $69 billion. This brings total year-to-date deal making to $195 billion.

And across the whole alternatives asset class space of private equity and hedge funds, Preqin predicts that the total of assets under management will hit $14 trillion by 2023, from $8.8 trillion. The firm has also said that private equity funds are predicted to overtake hedge funds to become the largest alternative asset class. They are projected to grow by 58 per cent, rising from their current AuM of $3.1 trillion to $4.9 trillion, while hedge funds will post lower growth of 31 per cent to rise from $3.6 trillion to $4.7 trillion in assets. Private debt and real assets funds are predicted to double their AuM.

North America saw 1,592 deals worth $28 billion and Greater China saw 1,112 deals worth $28 billion.

"The meteoric rise of the Asia venture capital market has been the story of the industry over the past few years, but much of the capital involved has come from corporate and strategic investors. The fund management industry itself remains relatively small compared to North America’s, but the signs of growth are good – strong performance and record capital calls have seen assets under management approach a quarter of a trillion dollars," Christopher Elvin, head of private equity at Preqin, said.

"This looks likely to grow further: investors across the globe are seeking venture investments in Asia, and many are looking to commit more capital over the next 12 months," he added.