With only one more quarter left in the year, it is likely that 2022 will go down as the weakest for PE fundraising in Southeast Asia in the last five years.
Data compiled for the ‘Private Equity in SE Asia: Fundraising Landscape 2022’ report by DealStreetAsia – DATA VANTAGE show a marked slowdown in the fundraising performance of private equity firms globally and in Southeast Asia.
Drop in final closes by SE Asia-focused funds
As of Sept. 30, only two Southeast Asia-focused PE funds secured a final close this year, amassing $505 million — a significant departure from the highs of 2021.
The two funds which secured their final closes so far this year include the second vehicle of ASEAN-focused AIGF Advisors and Singapore-based Tower Capital Asia.
Interim closes by SE Asia-focused funds also fall
As of September 30, six Southeast Asia-focused funds had secured an interim close this year to raise $1.47 billion in total proceeds. This compares to 12 interim closes and $2.31 billion in total proceeds in the whole of 2021.
Among funds that secured an interim close, Creador V raised the most funds at $660 million, which is 97% of the overall target of the vehicle. Growtheum Capital Partners Fund I raised $400 million, or 53% of the vehicle’s overall target.
Following the interim closes, there are 42 Southeast Asia-focused funds that are currently in the market to raise capital. These funds have a combined target of $11.12 billion, of which $3.56 billion has been secured — bear in mind that these aggregate figures exclude fund of funds.
Quadria Capital and GLP in Singapore have the largest Southeast Asia-focused vehicles on the fundraising trail. Each has a $1.1 billion target, followed by Crescent Point’s $900 million fund.
Asia, APAC, and global funds with SE Asia allocations
The report also analysed global funds that have minor allocations to Southeast Asia.
Eight funds in this category reached a full close in the first nine months of this year, raising $16.87 billion in total, of which Baring Private Equity Asia accounted for $11.2 billion.
The interim close performance of funds with Southeast Asia allocation was even more dismal, with only two updates so far this year. PE giant KKR announced a $4.1 billion interim close for its second APAC infrastructure fund, while Singapore-based Axiom Asia has managed to collect $212 million for its latest vehicle.
Among the biggest open funds with minor allocations for Southeast Asia are Warburg Pincus’s $16 billion 14th flagship growth fund, PAG’s $9 billion fourth buyout fund and Blackstone’s $9 billion Asia real estate fund.
The report identifies a few reasons for the slowdown in fundraising: Fund managers are operating in a challenging capital-raising market amid high macro uncertainty; inflation has soared since the second year of the pandemic and is driving interest rates up; rising interest rates are adversely affecting asset prices, making LPs more cautious.
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