Sustained by the growth of Asia, especially China and India, the ASEAN region is staged to enjoy rapid growth over the next decade. ASEAN increasingly stands out as a hotspot for private equity activity in Asia, alongside China, due to a rising number of fund managers establishing their offices in the growing region. Preqin’s Fund Manager Profiles product currently tracks 170 private equity fund managers that are headquartered in the ASEAN region. Collectively, these private equity firms have raised $19bn in aggregate capital over the last 10 years and have an estimated $6bn in available dry powder.
A hefty 61% of ASEAN-based fund managers are located in Singapore, followed by those headquartered in Malaysia (17%), Vietnam (7%) and Indonesia (5%). The remaining 10% is split between other countries such as Cambodia, Myanmar, Philippines and Thailand. Singapore-based fund managers account for the largest proportion of private equity fundraising in the region, accounting for 66% of total funds raised in the last decade and 83% of estimated dry powder. This indicates that Singapore has evidently a more mature private equity landscape than other South-east Asian countries, and continues to be regarded as a private equity hub and gateway for fund managers into ASEAN.
In terms of fund type, a sizable 63% of ASEAN-based fund managers consider the venture capital strategy as part of their overall investment criteria. Growth is the next most common strategy utilized by ASEAN-based fund managers and it accounts for slightly over half of the corpus (52%). Other strategies such as buyout (23%), mezzanine (15%), distressed vehicles (8%) and balanced (7%) trail somewhat behind.
Narrowing in on the regional focus of these 170 ASEAN-based fund managers, a significant 42% are seeking investment opportunities in Singapore, followed by Malaysia (28%), Indonesia (26%) and Vietnam (22%). Other frontier markets are also sought after by these fund managers, which comprise of Thailand (18%), Philippines (11%) and Cambodia (9%). Looking outside the borders of ASEAN, 28% of the corpus will look to invest in Greater China, 19% will target South Asia, 6% will invest in Australasia, and 5% will invest in North Asia (Japan and South Korea).
The top three ASEAN-based private equity fund managers by total capital raised in the last 10 years are Navis Capital Partners, L Capital Asia and Northstar Group. Navis Capital Partners, which is headquartered in Malaysia, has a buyout investment strategy and primarily invests in ASEAN and South Asia with a diversified industry focus. It has raised $2.8bn in capital commitments over the last decade.