KUALA LUMPUR: Preqin, the global leader empowering the alternatives community with essential data and insight has published its Alternatives in APAC 2024 report, covering regional analysis and country-specific insights for Greater China, India, Japan, South Korea, and Australia.
The report shows that while the short-term outlook for the Asia Pacific (APAC) region may appear cautious, driven by sluggish fundraising and geopolitical challenges, Preqin analysts maintain a positive outlook for the region over the long-term.
Preqin Vice President and Head of APAC and Valuations, Research Insights, Angela Lai said the APAC region has not been spared from the global macroeconomic headwinds that plagued the global market in 2023.
“But while the region’s fundraising may have reached a decade low and most country-specific funds struggled to raise capital, demand for Asia-regional funds grew amid investors’ stronger preference for diversification and reduced risk appetite,” she said in a statement.
The report also highlights a clear trend where investors increasingly favour experienced fund managers, and first-time fund managers with the gap between the average capital raised by the two groups reaching its widest since 2015, at a staggering US$78 million (RM50.57 million) in 2023.
In fact, experienced managers raised almost US$180 million (RM116.71 million) on average, the highest since 2015, while fundraising by first-time managers was over US$100 million (RM64.83 million).
While most single country-specific funds struggled with fundraising, the total capital raised for Japan in 2023 was US$11.8 billion (RM7.65 billion), exceeding 2022 by 13.4%, mainly driven by some larger-than-usual private equity fund closures.
Meanwhile, for India, Preqin analysts hold a positive long-term outlook for this market Private capital grew remarkably, doubling in the last 5 years to outpace other Asian countries, and private debt in India has the largest single-country assets under management (AUM) in APAC.
The view is that long-term investors will continue to be attracted by the fundamental growth potential of emerging markets like India and Southeast Asia, where early-stage venture capital opportunities are in abundance, and the developed markets of Japan and South Korea with their attractive real estate markets.
Additional key findings include global environmental, social and governance (ESG) fundraising fell by 38% from 2022 to 2023, and APAC was hit hardest, declining by 77%, with aggregate capital raised dropping from US$13.5 billion (RM8.75 billion) to US$3.1 billion (RM2.01 billion).
The report finds that the North Asian office market is becoming a focal point for deals, whereby in 2023, office transactions accounted for 39% of total deal value and 53% of the total number of deals in APAC.
— BERNAMA
