Three Asian secondaries funds raised $600 million in 2014, making it the most active year the region has seen to date, according to PEI’s Research and Analytics division.
In 2013, no secondaries funds were raised in the region and in 2012, two funds closed on roughly $70 million.
In 2014 Singapore-based firm ANT Global Partners raised $67 million for its ANT Bridge Asia No.5 Private Equity Secondary Investment Fund, according to managing partner Shunsa Hayashi. The fund launched in 2012 and closed in March.
STIC Investments, another Singapore-based firm, also closed its third dedicated secondaries fund, STIC Secondary Fund III. The 2012-vintage vehicle received KRW 239.0 billion ($217 million; €182 million) in total commitments and closed in October.
Hong Kong-based NewQuest Capital Partners closed the year’s largest regional secondaries fund on $316 million in July. Its second dedicated secondaries vehicle – NewQuest Asia Fund II – launched in 2013. Managing partner Darren Masarra previously said African, American and European investors expressed interest in the fund.
There is little competition in Asia’s direct secondaries sphere as very few players who have the resources or skill to be able to invest, explained NewQuest chief operating officer Amit Gupta. But he predicts that it could take as little as five years before the direct secondaries market in Asia is fully mature.
Andrew Ostrognai, a partner in Debevoise & Plimpton’s Hong Kong office agreed, adding that the robust growth of the overall secondaries market is another sign of broader market maturation.
“I think this is an exciting time for Asian secondaries. As Asian funds have become larger, more institutional and with deep track records, we see fertile ground for secondaries transactions. Added to that is major global secondaries players establishing teams in Asia, or beefing up existing teams,” Ostrognai said.
HarbourVest Partners, which is an LP in NewQuest’s latest fund, is one of the more active players in the region, having offices in Beijing, Hong Kong and Tokyo.
“In terms of absolute dollars, the Asian market is still a very small part of the global market,” managing director Tim Flowers told Secondaries Investor. “But I think more opportunities will arise in the next two to three years, and although the region is the least understood and least conforming of the global market, it is arguably one of the most interesting. A lot of firms are setting up offices in the region, but this is partly to do with marketing.”
Currently, there are two Asian secondaries funds in market with an aggregate target of $249 million, PEI data disclosed. These include ANT Japan Fund IV, which has collected JPY 12.5 billion ($105 million; €88.7 million) of its JPY 20 billion target, according to the firm.
Japanese firm WM Partners is also in market with its debut secondaries fund, which has collected almost half of its JPY10 billion target, according to PEI data. The firm did not return a request for comment by press time.
|ANT Global Partners||ANT Bridge Asia No.5 Private Equity Secondary Investment Fund||Singapore||$67m|
|NewQuest Capital Partners||NewQuest Asia Fund II||Hong Kong||$316m|
|STIC Investments||STIC Secondary Fund III||Singapore||$217m|
Source: PEI’s Research and Analytics division