In a business where fundraising surges when markets are buoyant and valuations are rich, secondaries stand out as one of the few genuinely contrarian opportunities. That tension between cyclicality and contrarian capital was a central theme at DealStreetAsia’s inaugural Leadership Roundtable: Asia Secondaries 2025, presented by LGT Capital Partners.
The roundtable featured senior executives from LGT Capital Partners, Pantheon, Jefferies, ChrysCapital, and Kedaara Capital.
“With secondaries, we have an opportunity to take a contrarian view and invest in markets that are temporarily out of favour,” said Peter Lui, Principal at LGT Capital Partners. “If we are right, this allows us to generate outsized returns.”
Investors pointed to valuation discipline, market cycles, and the growing sophistication of continuation vehicles (CVs) as core forces shaping debates around alignment, pricing, asset quality, and the evolving role of secondaries in Asia. These dynamics vary significantly across regions, particularly China and India.
China vs India
China presents its own set of circumstances for CVs, noted Dennis Kwan, Managing Director, Private Capital Advisory at Jefferies. Most assets are venture or growth-stage and tend to exit via M&A, with IPOs still the primary monetisation route. While Hong Kong’s market is currently open, uncertainty lingers if conditions change. India, by contrast, has produced marquee CVs with standout assets—two clear case studies being ChrysCapital and Kedaara.
“What they have done is effectively a case study of what the US General Partners would do with a trophy asset moving to a CV,” Kwan said.
Across markets, LPs maintain a simple goal: meaningful returns. “Typically, we target something north of 2x on a net basis, with compounding over three to five years,” said Brian Lim, Partner and Head of Pantheon’s Asia and Emerging Markets Investment teams. “An LP transaction is a different type of trade — it has distinct characteristics compared with a continuation vehicle or GP-led deal, and we evaluate each accordingly.”
India’s marquee CVs
In April 2024, India’s homegrown PE major ChrysCapital closed a $700-million continuation fund to retain its stake in the National Stock Exchange (NSE). The firm, which invested in NSE in 2014, could have exited at any point with a 6x return, but it chose a continuation fund to capture further upside, according to Saurabh Chatterjee, Managing Director, ChrysCapital.
Similarly, Kedaara closed a $300 million continuation fund, transferring partial stakes in Lenskart Solutions and Carehealth Insurance. The decision for Kedaara was never about a short-term IRR boost or anything cosmetic.
“As the GP, you have to be absolutely fair to both sides. You can’t sell too high— as you might in a clean exit — because you’re rolling a large part of your proceeds into the CV, and you have new LPs coming in. You can’t price too low either, because your exiting LPs, including the broader team, deserve a fair exit,” Manish Kejriwal, Founder & Managing Partner, Kedaara Capital said.
“So it is, in a sense, a perfect instrument. You even wonder why it wasn’t created sooner — and why we didn’t think of it earlier,” he observed.
What makes a CV work?
When executed well, CVs deliver. But success requires alignment among all parties. “…what is required is perfect alignment: the buyer, the seller, and the GP all agreeing on price and structure,” noted Lui.
Pantheon emphasised asset quality above all else. Not all companies fit CV structures, and many get screened out.
Jefferies data shows China clearing at wider discounts than the US and Europe due to sentiment, geopolitics, and complex exits. Many Chinese GPs are exploring CVs, but few portfolios meet the bar. Only high-quality assets draw meaningful demand.
Secondaries in Asia have matured significantly since the global financial crisis, shedding their stigma as “zombie fund” solutions. They are now recognised as proactive tools for liquidity and portfolio optimisation.
Investors increasingly benchmark Asian deals against global standards. “An Asian transaction must match the quality, return potential, and risk profile of top deals in the US or Europe,” Lim noted. Kwan added that Asian GPs are already on par globally; what the region needs is more appetite and allocation.
For deeper insights into CV structures, pricing, discounts, and the most prominent deals shaping Asia’s secondary market, download the full PDF for the complete analysis from DealStreetAsia’s inaugural Leadership Roundtable on Asia Secondaries 2025.
