Alt Investments
Asia-Focused Private Equity, VC Assets Hit Record
The research firm's figures add to the weight of evidence about how private market investing is arguably the dominant upward trend in wealth management, on a par with ESG investment.
Asia-focused private equity and venture capital assets under management hit a record $1.3 trillion at the end of December last year, part of a global trend of investors chasing perceived superior long-term yields in the space.
The e-commerce sector has boomed across APAC in the past five years – private equity/VC investment reached $128 billion in aggregate deal value between 2015 and 2019, reaching $35 billion in these sectors for 2018, according to new figures from Preqin, the research firm that tracks the space. Venture-backed deals in artificial intelligence companies in APAC have also become more common, with deal-makers completing a record-breaking 861 transactions in 2019.
Such data underscores how these parts of the alternative investment space have prospered on its promise of offering superior yields compared with listed stocks, for example, albeit for lower levels of liquidity and longer holding periods. Along with direct investment, the trend towards private market assets has been a strong one over the past decade or more.
Within Asia-Pacific, private capital has “flooded” into the Association of Southeast Asian Nations region (ASEAN) to back fintech start-ups: the region represented 48 per cent of total fintech deal value in APAC for 2019.
“Fundraising and dealmaking in APAC have been hampered by COVID-19 in H1 2020, sinking notably compared to the same period last year,” Dave Lowery, head of research insights at Preqin, said.
“Nonetheless, the region’s [private equity/VC] AuM is at an all-time high and the industry continues to support the digital transformation of key industries and fuel the development of new ideas in APAC. Activity is becoming more geographically diverse within the region, which is bringing new and fresh opportunities to the market. Investors are seeing the opportunity and the APAC market is growing fast,” Lowery said.
