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Private equity in Southeast Asia: Fundraising landscape 2022

The DealStreetAsia-Ontra private equity (PE) landscape report analyses the fundraising activity in the first nine months of 2022.

There is a slowdown in the fundraising performance of PE firms globally this year due to high inflation, liquidity tightening and rising geopolitical risks.

The relatively resilient Southeast Asian economies aren’t immune to the global uncertainty.

Only one Southeast Asia-focused PE fund reached a final close this year. This is a significant departure from a record-breaking year in 2021. The number of funds reporting interim closes also looks fairly weak.

This is a year that is likely to go down as the weakest of the past five years. The big question is whether the slowdown will persist well into next year. The simple answer is it is very unlikely. By next year, limited partners should have a better reading of risks, allowing them to engage with fund managers more confidently.

Economic fundamentals also dictate that SE Asia will grow at a rate above the averages for emerging markets and advanced economies next year. This is possible as exports recover and the expansion of household consumption continues.

Further, rapid digitalisation in the past two years has also created millions of new customers for retail and financial services. For instance, a recent DealStreetAsia study found that 97% of offline MSME merchants in Indonesia have adopted mobile payment apps. Nearly half of them adopted it for the first time during the COVID-induced restrictions in 2020-21.

The above developments should sustain Southeast Asia’s role as an attractive market for growth capital. We also expect private credit funds to perform relatively better as LPs seek predictable returns in a challenging environment. GPs are welcoming new LPs from China, which will continue in 2023.

The DealStreetAsia-Ontra PE landscape report distills the activity around regional and global funds in Southeast Asia.