Private Equity: Southeast Asian Private Equity Has $8.7 Billion to Spend

Despite the Coronavirus pandemic, private equity companies in Southeast Asia are sitting on a lot of cash.  In fact, the pandemic has created more opportunities for these companies.  One company is Ascent Capital Partners — a Singapore company planning to invest in tech, education, and healthcare start-ups.  These investments will be in Myanmar, which has made massive technological advancements in the past decade.  Ascent Capital has $70 million to spend, and has already spent $26 million in June.  It also plans to make multiple $10 million investments in the near future.  

Private Equity Remains Resilient 

Although Asia-focused firms initially struggled at the onset of the pandemic, there is a lot of cash they are ready to invest.  At first, these firms’ fundraising dropped by 44 percent; however, they now have a total of $8.7 billion to spend.  This cash will aim to invest in start-ups and emerging mid-sized companies in the Southeast Asia region.  Private equity firms are not the only companies sitting on tons of cash.  Venture capital also has cash on hand.  According to Insignia Ventures Partners — which closed at $200 million last year — investors are being more strategic.  The rise in funds spurred from the help of higher interest rates.  According to managing partner Tan Yinglan, “People saw how companies like Sea, Grab, and Gojek emerged as market makers, and have been rushing to cash in on the next generation of Southeast Asian start-ups, from tech giants to various other institutional investors, endowment funds, high net worth individuals, and family offices.”  Essentially, Southeast Asia is a strong emerging market, especially for the tech industry. 

With the help of the pandemic, the tech industry is thriving due to an increasing demand in digitalization.  Technology companies and similar emerging markets in Southeast Asia have remained resilient.  In the long run, private equity funds will capitalize on the expansion of these markets, as it seems certain they will continue to thrive.