The Growth of Asia-Focused Private Equity Unrealized Value – October 2014

by Claire McNeil

  • 23 Oct 2014
  • PE

The last decade has witnessed Asia-focused private equity unrealized value grow from $27bn (December 2004) to more than $330bn (March 2014), more than 10 times the figure a decade previously.

Preqin’s Performance Analyst shows that Asia-focused unrealized values more than doubled in the period between December 2006 and December 2009, and have shown strong increases in every year since. In fact, Asia-focused unrealized values witnessed less of a decrease (-2%) over 2008 than both their Europe-focused (-10%) and US-focused (-5%) counterparts, indicating that Asia-focused funds were less affected by the financial crisis. Asia-focused funds have also experienced greater unrealized value increases each year since.

As the graph above shows, the constitution of the total unrealized value from certain fund types has also changed. In 2004, 49% of Asia-focused unrealized value was from buyout funds; in March 2014 this figure stood at 37% - still the greatest proportion of total unrealized value. Over the same time period, venture capital has experienced a decrease in the proportion of total unrealized value, from 20% to 11%. Private equity real estate funds now account for 20% of unrealized value, compared with 13% a decade ago; distressed private equity, infrastructure and growth funds now also account for larger proportions than they did 10 years ago. 

As Asia has become more developed, private equity in the region is becoming more diversified with fund types other than buyout and venture capital growing in prominence, in terms of unrealized value. It will be interesting to see over the course of the next few years whether this development continues.

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