Bain expects private markets to account for 30 per cent of assets under management by 2032, underpinned by potentially higher yields, diversification and, in cases such as real estate, a hedge against inflation.
Fewer companies are going public too, with global initial public offerings falling 45 per cent from 2021 to 2023 due to increased regulation and higher costs, Bain said.
Preqin data showed that four in 10 family offices in the region plan to increase their exposure to alternative investments in search of higher yields, diversifying from conventional portfolios that are built around stocks, bonds and cash.
South-east Asia’s sovereign wealth funds, too, have been driving the growth of private capital markets.
Singapore’s Temasek, with a net portfolio value of $389 billion, has increased its allocation to unlisted assets to more than 50 per cent from about 20 per cent over the past two decades, it said.
Malaysia’s Khazanah Nasional Berhad has consistently allocated around 20 per cent to private markets between 2018 and 2023, with the share increasingly going to global private markets in recent years.
“In addition to family offices and sovereign wealth funds, there have been more corporate investors, asset managers, banks and insurance companies actively investing in alternatives in South-east Asia,” said Ms Valerie Kor, lead author of the report at Preqin.
“As these investors aim for long-term risk-adjusted returns, they continue to drive private capital growth both locally and globally.”
Ms Kor added that while private equity valuations have fallen and exits seem uncertain globally, the proportion of South-east Asia-based investors that are putting their money in private equity and venture capital has risen to more than 30 per cent in the first half of 2024, from 18 per cent in 2022.
Compared with 2023, a slightly higher percentage of South-east Asian investors reported that they were investing or considering investing in real estate.
More are also keen on investing in infrastructure, notably in emerging markets, Preqin data showed.
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Publish date : 2024-08-25 23:31:00
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