Asia-Based Private Wealth Investors’ Private Equity Preferences – September 2015

by Matthew Rautionmaa

  • 01 Sep 2015
  • PE

As Asian economies continue to develop and deploy investment capital across the globe, Asia has become an increasingly important region in the alternatives space. Preqin’s Investor Intelligence database currently tracks 85 Asia-based private wealth firms investing in private equity, one of the more preferred and mature alternative asset classes within the region. The vast majority of these firms are located in Singapore, India and Hong Kong, and the three most preferred private equity fund types for these countries are venture capital, buyout and growth. A further breakdown of these firms by geographic location and fund preference gives a glimpse into the make-up of Asia-based private wealth investors that invest in private equity.

The country with the highest number of Asia-based private wealth firms actively investing in private equity is Singapore, home to 27 family offices and wealth managers. This is unsurprising given Singapore is a major financial centre in the East. The most preferred private equity fund type of Singapore-based private wealth firms is venture capital, with 44% of firms indicating a preference for this strategy. The second and third most favoured fund types are buyout and growth, each attracting interest from 30% of firms, as seen in the above chart.

India hosts the second highest number (21) of private wealth firms investing in private equity within Asia. Within India, Mumbai is home to the most firms, with just over half (52%) located in the city. Over the last two decades India has experienced relatively rapid growth and success, both financially and economically, hence the significant appearance of private wealth firms. India has the strongest preference for venture capital funds within Asia, with 86% of India-based private wealth firms stating a preference for this fund type. Compared to Singapore, India-based private wealth firms have a much larger preference for venture capital and growth funds, but a similar preference for buyout funds (33%).

There are 19 Hong Kong-based private wealth firms that invest in private equity, overall placing it third within Asia. Again, venture capital is the most preferred fund type in the region with 47% of firms having a preference for this strategy. Buyout is the second most popular fund type, ahead of growth, with 32% and 21% of firms investing in each fund type respectively. These figures put Hong Kong-based private wealth firms’ private equity preferences on par with those based in Singapore.

In total, Singapore, India and Hong Kong collectively contain the vast majority (79%) of Asia-based private wealth firms on Preqin’s Investor Intelligence database that currently invest in private equity.

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