Presently, there are 53 ASEAN-based investors that are actively investing in private equity funds (excluding private equity real estate and infrastructure funds). The majority of these investors (58%) are based in Singapore. A further 19% and 8% of the investors are based in Malaysia and Thailand respectively. The remaining investors are located across Brunei, Cambodia, Indonesia, and Vietnam. Collectively, the ASEAN LP community manages more than $1.3tn in assets and has more than $31bn allocated to the private equity asset class, making this group a significant source of capital for fund managers to tap into.
Banks and investments banks make up 17% of ASEAN-based investors in private equity, making them the largest investor type in the region in terms of number of investors. Investment companies (13%) and wealth managers (11%) form the next largest pools of investors. In terms of private equity allocation, however, sovereign wealth funds are the largest investor type in ASEAN, accounting for 79% of the private equity commitments made by ASEAN-based investors. Other significant ASEAN investor types by capital committed to the asset class include banks and investment banks (9%), fund of funds managers (5%), and insurance companies (4%). The institutional private equity LP community in the ASEAN region is also comprised of corporate investors, endowment plans, family offices, pension funds, and government agencies.
For fund managers hoping to tap into ASEAN investors, it is worth noting that the majority of LPs from the region prefer to seek local exposure when committing to private equity funds; 79% of the ASEAN LP community will invest in Asia-focused funds. A smaller proportion of ASEAN investors, however, are willing to invest in overseas private equity markets to diversify their portfolios. Two-fifths (40%) of the ASEAN community will allocate capital to North America-focused private equity funds, while just under one-quarter (23%) will invest in Europe-focused funds as part of their private equity mandates.
When choosing prospective GPs, 25% of ASEAN investors will invest with a first-time fund manager, while 29% are only willing to commit to first-time funds raised by a spin-off team. Although 28% of LPs based in ASEAN will consider investing with a first-time fund manager, 18% prefer GPs that are raising follow-on funds and consequently will not commit to a first-time fund.