Private equity fundraising by Southeast Asia-focused funds slowed in the first half of 2025, even as global and pan-Asian funds with minority allocations to the region continued to attract sizeable commitments.
The slowdown among Southeast Asia-focused funds reflects a well-established pattern. Since 2018, first-half fundraising has tended to lag, with activity skewed towards the latter part of the year, except during the unusually strong vintages of 2021 and 2022. The same dynamics played out again in H1 2025, underlining the cyclical nature of capital raising in the region, according to DealStreetAsia’s latest report Southeast Asia Private Equity Funds: H2 2024 Review.
Only one Southeast Asia-focused private equity vehicle reached a final close in the period, namely Singapore-based Quadria Capital’s $1.07-billion third healthcare fund. The close set a new benchmark as the largest growth capital vehicle in the region, surpassing Creador’s $930-million Fund VI, signalling strong conviction in healthcare as a defensive growth theme.
Historical averages reinforce the expectation of heavier activity later in the year. Since 2018, the first half has seen an average of three final closes compared with five in the second, suggesting that annual outcomes are typically skewed towards second-half momentum. The steady stream of interim closes over the past two years further supports the likelihood that 2025 will follow this trajectory.
Even so, the broader fundraising environment remains challenging. Global liquidity conditions are tight, LPs are more selective, and competition for capital continues to intensify. Against this backdrop, managers will need to demonstrate clear sectoral edge and robust value-creation strategies to convert interim momentum into final closes.
Robust pipeline
As of end-August 2025, at least four private equity vehicles with exposure to Southeast Asia have reported interim closes. Notably, Ares Management’s third Asia private equity fund has secured $486 million towards a $900-million target, positioning it as the second-largest vehicle currently in the market to raise capital with Southeast Asia as a core market after Navis Capital Partners’s $1-billion Fund IX.
The current pace compares with six interim closes tracked in 2024 and seven in 2023, suggesting that a reasonably healthy pipeline is building despite broader fundraising headwinds. Interim activity is expected to provide much of the momentum for final closes in the second half, in line with historical fundraising patterns.
Even so, recent activity has been dominated by small-cap vehicles targeting under $500 million, highlighting how general partners are leaning towards leaner fund sizes as LPs grow more selective. This marks a shift away from the ambitious fund targets set during the liquidity-rich years of 2021 and 2022.
The trend is underscored by the experience of several established managers. Over the past two years, funds such as Mizuho Asia Partners Fund III, Asia Business Builders Fund II, and Growtheum Capital Partners’s debut fund all closed below target, reflecting the tougher environment and LP preference for disciplined fund sizing.
Maiden funds have been among the hardest hit by this shift in LP appetite. Growtheum Capital Partners was the last to secure a debut vehicle, closing in August 2023. This means no first-time funds have reached a final close in more than two years.
What LPs want
Florian Marquis, co-founder and CEO of StateSquare Capital, which is currently raising its debut buyout fund, said a team with a proven track record at prior platforms and meaningful alignment through “skin in the game” can significantly enhance limited partners’ confidence.
‘Transparency and consistent communication—beyond just annual reports—are essential, as is providing LPs with early-stage access to investment opportunities,” said Marquis.
To further build trust, he said, fund managers should actively partner with LPs to support their broader investment objectives.
“For example, helping family offices access businesses that complement their operating business can create meaningful value. These efforts collectively help foster long-term relationships and build a loyal, engaged investor base,” Marquis said.
While acknowledging that LPs have become increasingly selective, Kanchan Jain, Head of Ascertis Credit, notes that LPs want risk-adjusted returns combining yield and capital preservation with exposure to high-growth markets such as India and Southeast Asia.
“LPs are drawn to the significant illiquidity premiums available in Asia and capital preservation offered by direct lending strategies, especially in mid-market performing credit,” Jain said.
While mostly deploying in India, Jain said inbound inquiries for private credit in Southeast Asia are strongest among mid-market companies underserved by banks. These are typically high-growth firms with cross-border operations needing tailored financing, businesses in sectors constrained by regulation or out of favour with lenders, and companies with strong growth but insufficient collateral for traditional credit.
Glowing global appetite
To capture a fuller picture of capital flows into Southeast Asia, this report also tracks global and pan-regional vehicles that allocate a minority share of their commitments to the region.
In the first half of 2025, 11 such funds reached a final close, already surpassing half of the 18 recorded in the whole of 2024. Together, they raised $45 billion, almost equalling the $46.1 billion secured across the entire last year. The figures underline the importance of these broader strategies as conduits of capital into Southeast Asia, even if the region is not their primary focus.
A handful of mega funds drove a significant portion of this total. EQT’s sixth infrastructure fund closed at $23.3 billion, accounting for more than half of the H1 tally and setting a new record as the largest infrastructure fund tracked in our dataset. It overtook Copenhagen Infrastructure Partners’s fifth fund, which closed in the second half of the year at $13 billion, underlining the concentration of capital among the largest players.
Although typically only 5-15% of commitments from global and pan-regional strategies are ultimately deployed in Southeast Asia, their sheer scale means that even a small allocation can translate into sizeable deal activity.
Infrastructure funds led among global and pan-regional vehicles with minority allocations to Southeast Asia in H1 2025, with four final closes raising $38.1 billion. The momentum reflects Asia’s demand for transport, digital infrastructure, and clean energy, reinforced by US efforts to diversify supply chains away from China and increase exposure to alternative Asian markets.
Even so, diversified strategies remain historically dominant. Over the past five years, multi-sector funds have delivered 57 final closes and raised $173.6 billion, underscoring LP preference for balanced exposure in a region where single-sector depth is still limited.
The Southeast Asia Private Equity Funds: H1 2025 Review report has extensive data on:
- First-half fundraising trends
- Fundraising by strategy and sector
- Interim fund closes in H1 2025
- New fund launches
- Insights from fund managers
