Fundraising activity for Southeast Asia-focused private equity funds began with early signs of stabilisation in 2025, but the recovery stalled later in the year as mounting macro uncertainty and escalating geopolitical tensions in West Asia weighed on LP sentiment and slowed capital formation.
Data from DealStreetAsia’s latest report—Southeast Asia Private Equity Funds: H2 2025—reveal a stark reality for dedicated regional managers.
Only two Southeast Asia-focused funds, defined as those with full or majority allocations to the region, reached a final close in the second half of 2025. This brought the full-year tally to just three funds with a combined corpus of $1.52 billion, despite a promising fundraising pipeline.
The annual figures underscore a continued moderation in activity that has persisted since the market’s recent peak. The number of final closes has now declined for three consecutive years, falling from 12 in 2022, to seven in 2023, and five in 2024, the report shows.
To provide a more rounded picture of capital flows, the report also tracks global and pan-regional funds with minority allocations to Southeast Asia. This data set points to a significant concentration of capital into fewer, larger vehicles.
In the second half of 2025, six such funds reached a final close, bringing the full-year total to 17. While the number of these diversified funds dipped slightly from 20 in 2024, the aggregate proceeds rose sharply, largely on account of EQT’s sixth infrastructure fund, which closed at $23.3 billion.
The divergence in these figures points to a fundamental shift in LP strategy. Investors are increasingly concentrating commitments into established global and regional platforms rather than dedicated Southeast Asia funds, says the report.
As geopolitical uncertainty lingers, this “flight to scale” suggests that while the appetite for Southeast Asian exposure remains, the preference has shifted toward the perceived safety and diversified mandates of larger, multi-regional managers.
No debut funds or climate funds
The broader market slowdown has hit first-time fund managers the hardest. No debut private equity fund with Southeast Asia as a core focus reached a final close in 2025, extending a drought in new manager formation that has now lasted over 24 months. Growtheum Capital Partners remains the last firm to successfully close a maiden vehicle, back in August 2023.
This prolonged lull marks a significant shift for the regional ecosystem. Historically, debut funds have been a small but vital component, with 15 maiden vehicles raising $3.8 billion over the last decade, roughly one-fifth of the region’s total capital and fund count.
The current freeze suggests ’emerging manager risk’ is becoming harder for LPs to stomach. Without the buffer of multiple fund cycles, new teams are finding it nearly impossible to cross the finish line, argues the report.
‘Emerging manager risk’ is becoming harder for LPs to stomach.
A similar stagnation is visible in the ESG space. Despite global talk of “green” transitions, no climate or impact fund with Southeast Asia as a core market reached a final close in 2025.
The most recent activity remains the SUSI Asia Energy Transition Fund (SAETF). While it initially closed at $120 million in 2023, it was reopened in 2024 to secure an additional $139 million. Tellingly, these top-up commitments were largely sourced from existing LPs rather than fresh investors.
This underscores a nascent and struggling asset class. Over the past decade, only eight climate-focused vehicles have reached a final close in the region, raising a total of $1.51 billion, a modest fraction of the broader private equity pool.
Selectivity, not broad withdrawal
Rising geopolitical risks in West Asia are reinforcing LP selectivity rather than triggering a broad withdrawal from Southeast Asia, according to fund managers interviewed for the report. While uncertainty has induced a more cautious atmosphere, the primary effect appears to be a re-ranking of markets and strategies rather than a wholesale reduction in allocations.
“The past two years have been a tough fundraising environment globally, and Southeast Asia was no exception,” said Basil Lui, CEO and founding partner of August Global Partners. Despite the headwinds, Lui noted that AGP’s experience was encouraging, with its specialist healthcare fund reaching a final close above target at $150 million.
He added that while current geopolitical tensions have naturally made LPs more cautious across the board, the environment can ultimately favour specialist managers. Such firms, he suggested, are better positioned to offer the deep local expertise that investors now prioritise.
At the market level, managers point to a distinct reallocation effect as a result of the Iran War.
“LP capital will likely move away from higher risk geographies to safer regions such as Southeast Asia, which is politically stable, with domestic demand-driven economies, and not being directly exposed to conflict zones,” said Gary Ng, partner at Altair Capital.
Fund manager feedback points to diverging market positioning across Southeast Asia. Singapore emerges as the preferred base, supported by policy predictability, strong institutions, and its role as a regional hub.
As Ng notes, Singapore functions less as a domestic demand story and more as a platform for regional expansion, a view echoed by Lui. Malaysia is also seen as a beneficiary of supply chain reconfiguration.
Download the Southeast Asia Private Equity Funds: H2 2025 report for:
- Half-yearly and annual PE fundraising trends
- Fundraising by strategy and sector
- Interim fund closes in 2025
- New fund launches
- Fundraising trends by Global PEs with SE Asia allocations
- Insights from fund managers
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