Key Insights from the 2024 Southeast Asia Private Equity Breakfast
November 18, 2024
Pedersen & Partners, together with CMS Asia Pacific, co-hosted the 2024 Southeast Asia Private Equity Breakfast at the iconic Raffles Hotel in Singapore. The event provided a platform for over 115 senior executives and decision-makers from private equity, venture capital, asset management, financial institutions, advisory firms, family offices, and portfolio companies to connect and exchange insights.
Focusing on the theme "Navigating the Southeast Asia Investment Landscape: Opportunities, Trends, and Strategies", our co-chairs, Ruchika Gokarn, Client Partner and Head of ASEAN at Pedersen & Partners and Gerald Licnachan (CMS) along with the panel of experts: Arjun Anand (Verlinvest), Rishika Chandan (Venturi Partners), Alptekin Diler (Investcorp International), Winston Mandrawa (Affirma Capital), Sugandhi Matta (ABC Impact), and Ernest Xue (Eurazeo) examined critical trends shaping the region's investment and M&A landscape.
Key Takeaways from the panel discussion:
Exits 📉: While deal flow remains strong, market softening from 2023 persists. GPs are holding onto quality assets longer, and there’s a continued gap in valuation expectations between founders and investors/buyers.
IPO Markets 📈: Apart from buoyant conditions in Malaysia, IPO activity in Southeast Asia has been relatively quiet, with equity capital markets still somewhat inactive.
Deal Timelines ⏳: Deal processes are taking longer, ranging from 6-12 months after term sheets, with some deals ultimately not closing.
Impact Investment 🌱: There’s significant growth in impact investment, with increasing capital flows from Asian LPs. However, the region remains under-invested and under-represented in this space.
Regional Capital Flows 💸: While local investors continue to invest in Southeast Asia, capital from the US and Europe remains less prevalent.
Alternative Financing 💼: There has been a noticeable rise in private credit options for portfolio companies, providing more flexibility to businesses and are becoming a more common feature in funding cycles.
ESG 🌍: Governance is now a core focus in the mid-market space, with GPs dedicating significant time to ensuring robust governance standards and strategies.
Value Creation 🛠️: A strong business plan and skilled talent are essential for value creation. Private equity firms in the region are increasingly building ‘operating partner benches’ with sector and functional specialists.
Geopolitics 🌏: Despite ongoing geopolitical concerns, GPs remain optimistic about Southeast Asia’s opportunities, driven by shifting supply chains, GDP growth, and a growing consumer-driven economy. A long-term view is essential to navigate the region’s complexities.