In this edition, we capture investor insights on SE Asia’s private equity story, which is not all gloom and doom despite a tepid exit landscape. We also analyse the Indian market regulator’s long-anticipated changes to the framework governing Alternative Investment Funds (AIFs).
SE Asia still delivers for private equity
Private equity investors remain broadly upbeat about SE Asia’s prospects even though the region still hasn’t delivered consistent exits. Despite the odds, deals are getting done, capital is being deployed, and confidence in the region’s fundamentals remains intact.
Take Creador, the Malaysia-headquartered firm, which has already committed around 30% of its current $930-million fund, and if it closes another deal in the pipeline, that figure will jump to 40% — all within just one year.
Even global funds with a SE Asia allocation are seeing positive momentum. The number of such fund closes in H1 2025 already exceeded half of the whole 2024 figure. In terms of value, the $45 billion raised almost equalled the $46.1 billion total of last year, according to DealStreetAsia’s DATA VANTAGE.
Although typically only 5-15% of commitments from global or pan-regional strategies are deployed in SE Asia, they remain an important source of capital for larger transactions, as our research highlighted.
One such manager is Blackstone, which has seen the last 12-15 months as the most active period for its Asia fund. “Uncertainty creates more opportunities, and the bid-ask spread can compress,” Aravind Krishnan, managing director of Blackstone Private Equity Group, spoke at our Asia PE-VC Summit 2025 last week.
Despite the market volatility, SE Asia-focused investors are emphasising core strengths instead of short-term uncertainties to showcase the region’s resilience. Investors know that buyout strategies allow them to “control the micro” and ride through the macro swings. Even in a traditional growth market like Southeast Asia, the tilt has been toward growth buyouts, Bain & Co said in its Asia Private Equity Report 2025.
“I can’t remember a time in my career when things weren’t volatile or uncertain,” quipped Omar Mahmoud, managing director of Creador.
Yet the market is far from being frictionless. Growtheum Capital Partners, for example, has completed just one transaction in the last 18 months. Projecting a five-year business plan now requires building in multiple volatility scenarios, managing partner Amit Kunal explained. Still, he sees “scarcity value” – when high-quality companies come to market, they will shine, citing his experience with local companies like Monde Nissin, Metro Pacific, and Vincom Retail.
Ultimately, the region’s Achilles heel remains exits. Creador has invested $2.1 billion and realised $2.3 billion to date, with its first three funds delivering more than 1.5x DPI. But SE Asia trails far behind the US, and even some regional markets, in distribution.
For Blackstone, returns have accelerated in the past couple of years, led by India and Japan, thanks to their high liquidity volume. The lesson for SE Asia is clear: exit optionality is key. If public markets are illiquid, private markets can also be illiquid.
Across SE Asia, Thailand and Malaysia might have a relatively more buoyant stock market, but elsewhere in the region, liquidity remains elusive. More so, when Series G-H rounds to absorb capital are no longer the norm, like in the 2021 era.
Why SEBI’s AIF overhaul is game-changing
Indian market regulator Securities and Exchange Board of India (SEBI) recently announced a set of long-anticipated changes to the framework governing Alternative Investment Funds (AIFs), the most significant one being the reduction of the threshold for Large Value Funds (LVFs) from Rs 70 crore to Rs 25 crore.
LVFs are specialised schemes under the AIF framework, where all participating investors (barring the fund manager, sponsor, or specific connected parties) must be accredited and are required to make a significant minimum investment.
The reduction in threshold fundamentally reshapes who can participate in India’s private capital markets. With the latest move, SEBI has widened the door for more sophisticated investors, including family offices, institutional players, and high-net-worth individuals, to contribute meaningfully to India’s capital formation.
These are investors who may not have met the earlier Rs 70 crore requirement but possess the financial expertise and appetite to invest in high-growth, high-risk sectors like startups, infrastructure, and innovation.
Another important change is the introduction of a dedicated framework for schemes open exclusively to Accredited Investors (AIs) — individuals or institutions certified as having the financial sophistication and capacity to invest in complex, high-risk products.
This, say experts, isn’t merely a technical tweak; it signals a deeper maturity in India’s regulatory approach.
By moving away from a blunt Rs 1 crore minimum ticket size and instead relying on investor accreditation based on an independently validated framework, SEBI is rightly acknowledging that sophistication is not solely a function of wealth — it’s about understanding risk, navigating complexity, and having the financial capacity to absorb it.
“The reduction of LVF thresholds and the introduction of AI-only schemes are timely reforms that broaden access and modernise the alternatives framework,” Gopal Jain, Managing Partner & CEO at Gaja Capital, told DealStreetAsia.
“We believe PE and VC capital must be more inclusive, with more Indians participating in the country’s innovation-led growth… These are positive steps that will support fund structuring, channel capital into innovation, and strengthen the industry’s growth trajectory,” he added.
The LP View
Morgan Stanley Private Equity Solutions looks to back GPs with proven playbooks, according to partner Pamela Fung, as she believes that inefficiencies in the market enable investors to drive meaningful value and turn businesses into gems. But she also noted that GPs in Asia are relatively new to value creation.
Indonesia’s Danatara emerges as a new LP for mid-market private equity and private credit funds globally, as the sovereign wealth fund searches for both returns and knowledge sharing.
Top PE developments
Fundraising
China’s Trustar Capital is seeking a final close of its fifth flagship US dollar fund at approximately $1.3 billion in a fortnight, after closing over 4.5 billion yuan ($626.4 million) for its RMB-denominated vehicle.
Abu Dhabi’s BlueFive Capital is expected to raise $1 billion for a new fund focused on private equity investments in Asia by the end of this year.
Deals
65 Equity Partners and UK-headquartered Vitruvian Partners have invested $188 million in UltraGreen.ai, an AI-powered surgical imaging platform, at a $1.3 billion valuation.
KKR ramps up its Japan PE presence with the acquisition of insurance distributor Hoken Minaoshi Hompo Group, as local PE shop Advantage Partners exited.
SE Asian online car marketplace Carro has raised $60 million from Cool Japan Fund ahead of a potential IPO.
The merger discussions between Nasdaq-listed Grab Holdings and Indonesia-listed GoTo fell through yet again.
People
BlackRock’s Asia private credit team is reported to see an upcoming departure of Hong Kong-based director Chris Shang, who will move to Granite Asia.
