As investors seek to diversify their capital allocation, the investment landscape has been witnessing a blur between asset classes, thanks to an increasing appetite to package multiple asset classes into single mandates, said Aberdeen Standard Investments’ co-head of Asia private equity, Wen Tan.
“For example, everything under liquid alternatives – it could be private equity, real estate, infrastructure [fully integrated] into a single package. Sometimes, it could be an equities package where it’s mainly public equities but with a sleeve for private equity or it could be private debt. That blurring of boundaries is changing the landscape quite a bit depending on how capital flows work. The trend is still relatively new but it’s one that we expect to see continuing,” he told DEALSTREETASIA.
Tan added that what the global asset manager is trying to do at the moment is to move away from areas where there is a capital surplus.
“We don’t mind where that is but we just need to be cognizant of the flows and the demand-supply equilibrium in each segment of the market,” he added.
Overall, Southeast Asia is still rather undervalued, with the exception of Indonesia, said Tan.
“There are parts of Southeast Asia, Indonesia in particular, where they’re definitely in the high teens [growth] at the moment but you can look at the region overall and say it’s undervalued. There are segments that have been overvalued – not just geographically – but you can say that up until recently, late-stage tech valuations have been very high. Overall, valuations haven’t been cheap but they haven’t been expensive on the blanket basis either,” he said.
Aberdeen Standard Investments marched into 2019 with the announcement of a $13 million minority equity investment into Singapore-based insurtech startup Singapore Life last month. Recently, it acquired Hong Kong-headquartered real estate manager Orion Partners for an undisclosed amount to boost its Asia Pacific presence.
Commenting on the Singapore Life investment, Tan said it was an investment from Aberdeen’s balance sheet.
“As distribution channels change, that whole shift from bricks-and-mortar to online is a global trend. The growth in life insurance products as a share of overall savings, that’s a global trend as well. From our perspective, it gives us additional depth in that online life insurance channel. It’s not a stand-alone [mandate for] Singapore, we’ve been doing that in the UK and elsewhere as well.
Based in Hong Kong, Tan focuses on sourcing, evaluation and execution of primary investments in Asia with a particular focus on Southeast Asia. Prior to Aberdeen Standard Investments, he was a partner with FLAG Capital Management – a subsidiary of Aberdeen Asset Management.
Edited excerpts: –