In the face of unprecedented challenges posed by the COVID-19 pandemic, the fundraising performance of Southeast Asia-focused private equity funds in 2020 did not disappoint as investors remained largely confident of the region’s macro fundamentals.
According to Private Equity in SE Asia: H2 2020 Review, four SE Asia-focused PE funds managed to record a final close in 2020—three of these were closed in the second half of the year—with a total corpus of $1 billion. This compares to five final closes with $1.3 billion in total value in the previous year.
More encouraging was the interim closing performance of SE Asia-focused funds. Ten funds raised $1.4 billion in capital through interim closes in 2020, higher than six funds and $863.5 million in 2019. This, coupled with an expected regional economic recovery, raises expectations of a better overall fundraising performance this year.
“Southeast Asia performed relatively well through 2020, despite the challenges presented by the COVID-19 pandemic. Northstar’s core markets [Indonesia, Vietnam and Singapore] were resilient with stable macro environments. While some limited partners adopted a wait-and-see approach in Q2 and Q3 of 2020, we are now hearing them being rather positive towards Southeast Asia,” said Sunata Tjiterosampurno, co-chief investment officer at Southeast Asian PE major Northstar Group.
Tjiterosampurno believes positive LP sentiments were influenced by factors beyond the rollout of COVID-19 vaccines in Southeast Asia such as the ongoing digitalisation of businesses that was accelerated during the pandemic.
Rise of global funds
On top of the capital coming from SE Asia-focused funds, companies in the region are likely to benefit from global PE firms seeking to capitalise on emerging market opportunities outside China.
Seven global funds with partial allocations for Southeast Asia secured a final close in 2020, up from six in the previous year, with the total proceeds climbing 24% year-on-year to $16.8 billion.
Hong Kong-based Baring Private Equity Asia emerged as the largest fundraiser in 2020 after closing its $6.5 billion fourth Asia-focused fund, followed by CVC Capital Partners ($4.5 billion) and PAG ($2.75 billion).
Meanwhile, global PE giant KKR & Co secured $13.1 billion for its fourth Asia fund—this is the largest ever PE vehicle raised for Asia—and is yet to hold a final close for the vehicle.
“Southeast Asia’s sizeable millennial and rapidly urbanizing population is shaping the speed of growth and technology innovation. As such, key areas that we are focused on include financial services, education, healthcare, consumer, real estate and digital infrastructure,” said Neal Kok and C.K. Yan, private equity directors at KKR & Co, in a written response to DealStreetAsia.
DealStreetAsia – Research & Analytics’s latest report, Private Equity in SE Asia: H2 2020 Review, captures the trends in PE fundraising for Southeast Asia, including by global funds with a mandate to invest in the region.
- Fundraising performance per PE strategy (growth capital, buyout, etc.)
- Trends in fundraising since 2018
- Fundraising by regional and global funds for SE Asia
- Funds currently in the market
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