This edition looks at new allocations from Asia Pacific investors, the case for private market products for retail investors, and top PE developments from across the markets.
Growing pool of APAC-based capital for GPs to tap into
There is no shortage of capital, but rather the preference for deeper and more liquid markets has led allocators from Asia Pacific (APAC) to invest the bulk of their assets into the US and Europe.
But that is changing, as investors find themselves over-invested in developed market assets and seek diversification in their portfolios, or aim to make strategic inroads into various markets in South and Southeast Asia. And, there are new groups of limited partners that are ready to back GPs, including emerging managers, in this region.
Indeed, the assets under management (AUM) in APAC amount to just under a third of total global AUM, comparable to that in the US and Europe, according to Preqin data. A large part of that AUM is invested in the US, in part owing to legacy decisions, and commercial investors’ focus on fundamentals such as fund strategies, exit conditions, and capital markets’ strength. Asian markets have yet to reach comparable levels in such depth and liquidity.
According to one advisory firm, however, conversations with APAC-based LPs indicate that more than half of them intend to allocate to Asia and then Europe. Top choices of markets are Japan and Australia, and pan-Asian and Southeast Asian funds.
Among the emerging APAC-based LPs are financial institutions in Japan and South Korea, including regional banks, which are exploring investments in buyout and private credit funds. The financial institutions could also be strategically allocating to corporates in Southeast Asia and India as a way of growing their lending books, according to an advisor.
There is also a growing pool of family offices based in Singapore, Hong Kong, and Australia, set up by Southeast Asian families running conglomerates, as well as European families and new-generation entrepreneurs who have sold their businesses.
That is good news for emerging GPs, who tend to have a challenging time fundraising even without the overall poor investor sentiment. A placement agent disclosed there are fund-of-funds “with an emerging manager bucket”, and family offices, with strategic angles, who are more open to first-time funds.
Still, the fact is that many global investors who have poured funds into this part of the world, particularly into venture capital funds during the peak in 2021, “have been burnt,” as the advisor put it, and have continued to stay away from the sector.
Indeed, even as commercial LPs continue to be highly selective, some GPs have said that even some development finance institutions (DFIs) have turned risk-averse, and, unlike before, are favouring more experienced managers.
To that end, some governments in this region have made inroads into developing their local PE-VC ecosystems.
In Malaysia, for one, state-owned institutions and public pension funds such as Khazanah and KWAP have unveiled a series of initiatives to support and spur activity in the sector.
Singapore, Hong Kong, and China have incorporated ecosystem development into their broader policy mandates. In India, institutions such as the National Investment and Infrastructure Fund (NIIF) have been working to involve more conservative institutions, such as the Life Insurance Corporation of India, in private markets, as one industry expert noted. This aims to institutionalise domestic capital and broaden participation in private markets among local investors.
Private vs public for retail investors
Blue Owl Capital has called off its credit funds merger following negative market reactions to the firm halting redemptions in preparation for the intended transaction. It has rattled retail investors at a time when more managers are pushing for what they call semi-liquid access.
The firm had planned to merge a smaller, non-traded private credit fund into a bigger, publicly traded vehicle, a deal that would reportedly leave investors in the non-traded fund with a 20% loss. Still, the market seemed less concerned about recent red flags in the private credit industry, but more about whether the average investor can stomach the risks associated with the generally illiquid asset class.
Blue Owl is among a host of global asset managers, such as Blackstone, KKR, EQT and Apollo, setting up private wealth businesses and increasingly pushing into the Asian market.
While managers and distributors often market such funds’ quarterly redemption feature, the cap of around 5% of NAV, and GPs’ ability to block withdrawals, stretches the definition of semi-liquid. And while PE firms emphasise the need for investor education on the asset class, some managers penalise investors who cash out early. That does not look like democratisation.
A recent paper by US academics Ludovic Phalippou and William Magnuson discusses litigation risks around private equity and public capital, and individual investors do not appear to be that well protected.
For one, the relationship between investors and private funds remains largely governed by contracts and market practice, rather than regulator oversight. Also, the paper’s authors noted that “several law firms have laid out strategies for expanding investor bases while minimising regulatory burdens.”
At the same time, disclosures that may be well understood by institutional allocators can overwhelm or mislead retail buyers. “The graphs have remained the same, the audience has changed, and that has dramatic consequences,” the paper’s authors noted, referring to typical performance disclosures by private market firms.
“Private equity investment products are sold through regulated platforms, often with marketing language that mirrors mutual funds or pension products. The average investor might well assume, and reasonably, that the legal protections are similar as well. But in substance, they are entering into blind-pool arrangements governed by contracts they cannot read and fee regimes they cannot see,” the paper pointed out.
Still, as former Singapore central banker Ravi Menon noted, the growth of the private markets complements investors’ waning interest in public markets, which have strict compliance standards, but which have also raised the cost of doing business.
Speaking at a Singapore conference of business and political leaders this week, Menon noted that retail investors can invest in single securities with minimal to no restrictions. “That is a highly risky venture.”
Advocating for diversification of investment strategies, Menon said: “We need to find ways in which more collective investment schemes can be developed, in which retail investors can participate.”
SGX on revival path
Singapore’s stock market is quickly coming back to life about a year after it received a proposal from the Singapore Venture & Private Capital Association (SVCA) to make a case for regulators to stimulate the market that would help fund managers secure exits and sustain the ecosystem.
That effort gave birth to the so-called MAS review group that has just wrapped up reviewing and releasing its last report. MAS most recently announced a new scheme for SGX-Nasdaq dual listings and unveiled Amova AM (formerly Nikko AM), AR Capital, BlackRock, Eastspring Investments (Singapore), Lion Global Investors, and Manulife IM to help manage S$2.85 billion under its Equity Market Development Programme.
While regulators in the city-state have long been attempting to enhance the liquidity in its capital markets for years, 2025 marked a year that signals a major resuscitation with the listing of 65-backed AvePoint and the debut of UltraGreenAI, which filed a prospectus on November 19.
Top PE developments
Fundraising
KKR is reportedly raising its fifth Asia private equity fund, with a target of $15 billion. The fund will continue to focus on sectors including consumer, life sciences, financial services, healthcare and industrials.
Japan Investment Corporation (JIC), along with its subsidiary JIC Capital, has recently launched a new 800 billion yen private equity fund targeting industrials. JIC has also made another 3-billion yen commitment to Kepple Liquidity Fund 2, a Tokyo-based venture capital secondary fund.
Deals
KKR will also provide a $750-million bespoke financing solution to Chandra Asri Group to acquire ExxonMobil’s Esso-branded retail fuel station network in Singapore.
Affinity Equity Partners has sold Burger King to Goldman Sachs’ alternative unit, returning cash to LPs in its fourth fund after eight years.
Kuwait’s $28 billion asset manager Wafra has bought a minority stake in Ardian in a push to expand into private markets as well as secondaries.
Blackstone has sold down about 9.5% in Mphasis in a block deal after initially entering into the investment in 2016 and subsequently taking control of the firm with a $2.8 billion commitment in 2018.
Interviews
French sovereign fund Bpifrance is seeking a closer relationship with Temasek, with CEO Nicolas Dufourcq mooting the idea that the Singapore state investor could take an LP interest in its fund-of-funds.
An uptick in exit transactions in China, with assets bound for listing in Hong Kong and elsewhere, portends well for secondary activity in the market, according to AB Values.
People
KKR is opening an office in Abu Dhabi, which will be led by Julian Barratt-Due, Managing Director and Head of Middle East Investing. The Abu Dhabi office, which is subject to final regulatory approval, adds to KKR’s existing regional hubs, following an office set up in Dubai in 2009 and in Riyadh in 2014.
Adams Street Partners has opened an office in Hong Kong, expanding its Asia-Pacific footprint, which includes offices in Beijing, Seoul, Singapore, Sydney, and Tokyo.
CapitaLand Investment Limited (CLI) has appointed Kishore Moorjani as CEO, Alternatives, Private Funds, and Chairman, CLI India. His mandate includes asset-backed alternative strategies across credit, insurance solutions, secondaries, and private equity.
The CEO of Malaysia’s largest civil servants’ pension fund, KWAP, is reported to be stepping down as her five-year term is ending this month. Nik Amlizan Mohamed was appointed in November 2020. Her successor is yet to be announced.
