Beyond the buyout is our weekly newsletter dedicated to private equity developments across Asia Pacific, with a special focus on Southeast Asia.
This week, global mega fund leaders shared fresh concerns as the US trade war drums grow louder, putting deal pipelines and fundraising ambitions under pressure from mounting geopolitical crosswinds.
As investors take a hard look at asset classes that can weather the storm better, infrastructure is emerging as a standout, especially in a nascent market like Asia Pacific.
Blackstone, EQT, and BlackRock clear the air about uncertainties
Three of the world’s largest alternative asset managers voiced caution over escalating policy uncertainties during their first-quarter earnings calls in the wake of the Trump administration’s sweeping new tariff regime.
Blackstone president Jon Gray said in the group’s quarterly call on Thursday: “We believe that the direct first order exposure across our portfolio is limited, although there is potentially material impact to a relatively small group of our companies…”
“We expect that the market volatility and geopolitical concerns will have some effect [on fundraising],” said Gray.
The Wall Street giant has gathered over $4.4 billion in the first close of its third corporate private equity fund for Asia and is targeting a substantially larger fund size than its precursor, a $6 billion vintage.
EQT, which held the call with analysts on Wednesday, warned that the current market turbulence could prompt some LPs to cut down exposure in their private buckets and affect their decisions to write new cheques.
“With lower public market valuation, some clients, especially those with mature private market programmes, often are forced to limit their private market investments to align with target allocation levels,” said EQT head of business development Gustav Segerberg.
“If deal activity slows down materially, it means less liquidity back to the client, which in turn reduces their ability to make new commitments,” he said. The group expects at least another two years for global fundraising volumes for private markets to bounce back to the record level in 2021.
But the Swedish group’s outgoing CEO, Christian Sinding, thinks the scenario may only persist in the current environment where exits and dealmaking are taking longer to complete.
“We don’t see investors not committing to a 10-year lifetime fund due to short-term volatility because that’s a strategic allocation and part of how they want to allocate capital over the long term,” he said.
The group most recently pulled in over $10 billion for its ninth Asia private equity fund with commitment from US pension funds.
BlackRock, one of the first asset managers to kick off Wall Street’s latest earnings season, echoed a similar sentiment that investment pace may temporarily slow down as the dust is still settling.
“Markets may take some time to sort out saber rattling around trade and tariffs, but BlackRock and our clients see growth and opportunity. Clients may look to preserve capital in the near term, but ultimately, we’ll continue investing,” said CFO Martin Small.
