Dear Reader
The week has been eventful for the team at DealStreetAsia, as we hosted our first in-person summit in nearly three years.
The Asia PE-VC Summit 2022 drew attendees and speakers from across Asia, who shared their insights and perspectives on the top trends, as well as issues that are facing private capital investors in the current environment.
Here are some nuggets from the two days of discussions:
A significant development is limited partners becoming GPs themselves, stepping up direct investments. And, even as LPs have been happy to commit more capital, they are demanding more transparency, and information from GPs, particularly on ESG.
One LP, Pictet Group managing partner Francois Pictet, said at a fireside chat that as LPs they are pushing back on GPs that return to the market too quickly on their next fund. Pictet expects that the fundraising cycle will start to lengthen.
GPs are in broad agreement that Southeast Asia, hitherto a fragmented emerging region that provided comparatively poorer returns, is of growing interest to investors amid challenges in the key markets.
Still, even as GPs could be stepping up deployments in Southeast Asia, the region has its limitations. “This market lacks depth and scale,” Thomas Lanyi, head of Southeast Asia at CDH Investment Advisory pointed out.
China has become a tricky play, but investment activity in China will sustain in the longer term, as the market creates its own ecosystem of capital, investment opportunities and growth, noted Baring PE Asia managing director Kenneth Cheong, in a separate discussion.
Among the strategies that are picking up pace is private credit. A number of new private credit funds have been launched recently, and speakers note that opportunities abound in Southeast Asia, particularly Indonesia.
Secondary transactions are picking up steam in Southeast Asia as private equity and venture capital funds seek more options for liquidity. Investors on the panel discussion estimated that the unrealised assets in Asia could reach as much as $1 trillion this year.
There is still a gap in later stage growth capital funding in Southeast Asia, particularly at the Series C and D rounds, according to Asia Partners’ Nick Nash.
upGrad, India’s largest online higher education platform, has earmarked as much as $30 million for expansion in Southeast Asia, co-founder and chairperson Ronnie Screwvala said during a fireside chat.
Screwvala also argued that investors are just as accountable as founders, particularly when startups run into issues.
Finally, investors across the board believe that despite the “winter”, capital will be available in Asia; the question is where the capital will go.
What else big happened this week:
Indonesia Investment Authority has signed a $300-million financing facility with online travel agent Traveloka, confirming a DealStreetAsia scoop from June. BlackRock, Allianz Global Investors, Orion Capital Asia are among the other investors who joined the financing round.
Line Man Wongnai, a food delivery startup in Thailand, is the country’s newest tech unicorn after its latest funding round.
Elev8 Venture Partners, a VC firm backed by early-stage investor Venture Catalysts, has launched a $200-million India-focused fund to invest in growth-stage, technology-driven companies.
Coming up:
Look out for our coverage on the other discussions in the coming week or so. In the meantime you can already sign up for our next summit – the Indonesia PE-VC Summit, happening in Jakarta in January!
