While North America and Europe-based investors typically dominate the private equity secondary market in terms of deal flow, investors in Asia and the Rest of World have become increasingly aware of the opportunities the secondary market has to offer and are also looking to take advantage of it. Preqin’s Secondary Market Monitor currently tracks 72 investors located in Asia and Rest of World looking to purchase private equity or real estate fund stakes, accounting for 11% of all secondary market buyers. Hong Kong and Australia represent the largest portions of buyers in Asia and Rest of World with both comprising of 17% of all buyers within the region.
Krung Thai Bank is one example of an Asian institutional investor seeking additional exposure to private equity funds via the secondary market. The Thailand-based bank is open to purchasing private equity fund stakes on the secondary market and is likely to take part in such investments on an opportunistic basis going forward. When investing in private equity, it will consider a variety of fund types including venture, buyout and growth vehicles. It typically invests domestically, but will also consider offshore funds.
On the sell side, there are currently 33 investors located in Asia and Rest of World seeking to exit private equity or real estate fund investments, comprising approximately 12% of all potential secondary market sellers. The majority of sellers within the region are located in the United Arab Emirates and Australia as both countries account for 12% of all sellers in Asia and Rest of World.
One Asian investor that recently expressed an interest for selling off some of its private equity fund investments is BMB Investment Bank. Due to changes in legislation such as Basel III and Volcker Rule, BMB Investment Bank’s is looking to significantly reduce its exposure to private equity. It has already sold approximately 25% of its private equity portfolio, and will look to sell additional fund stakes on the secondary market going forward. Its portfolio is known to include Europe and North America-focused venture and mid-cap buyout funds