2024年亚太私募股权年鉴-英-德勤

AsiaPacific

PrivateEquity2024Almanac

AsiaPacificPrivateEquity2024Almanac

Contents

Foreword02

Executivesummary03

Marketinsights05

Lookingtothefuture13

Marketstatistics15

Drypowderandfundraising22

DeloitteAsiaPacificPrivateEquityteam24

Appendix

Topdealsbygeography25

Ourapproach31

Glossary32

01

AsiaPacificPrivateEquity2024Almanac|Foreword

Foreword

WelcometotheinauguralDeloitteAsiaPacificPrivate

EquityAlmanac.PrivateEquity(PE)playsapivotalrole

inthehealthandgrowthofeconomiesaroundtheworld,

andnowheremoresothaninAsiaPacific.TheshareofPE

drypowderinAsiaPacificisdisproportionatelylargerelativetotheregion’sPEvolumes:AsiaPacificPEdrypowderis23.7%oftheglobaltotal1whereasAsiaPacificPEdealsonlyaccountedfor15.2%ofglobalPEdealsin20232–aclearindicationoftheincreasingmomentumofPEcapitaldeploymentintheregion.Deloitteisdeeplycommittedtosupportingtheindustry

andenjoysaprivilegedpositionasatrustedvaluecreation

advisoracrosstheend-to-endPEownershipcycletomany

oftheleadingparticipantsinthemarket–beitdealoriginationandduediligenceoroperationalconsultingthroughtofundvaluationsandaudits.Thisexposureandourextensive

experienceacrossthesectorputusinastrongpositiontodevelopuniqueinsightsandperspectivesonthemarketandtoprovideanalysisandcommentaryonmarkettrendsandtrajectories.

OuraiminproducingthisAlmanacistoprovidebothadetailedandcomprehensivepictureofPEactivityacrossAsiaPacificin2023,andananalysisoftheoverarchingthemesthatemerged.Wehavestriventopresentthosetrendswithinthecontext

ofrecentmarkethistoryandhavealsocastourgazeintothefuturetoexploresomeofthelikelytrendsandinfluencesthatwebelievewilldriveactivityinthecomingyear.

Wehopeyoufindthisbothusefulandthought-provokingandwouldwelcometheopportunitytodiscussourfindingsandperspectivesinmoredetail.

DwightHooper

Partner

Co-Leader,DeloitteAsiaPacificPrivateEquity

SatoshiSekine

Partner

Co-Leader,DeloitteAsiaPacificPrivateEquity

TheAsiaPacificPEmarketisdynamic

andgrowing.Deloitte’sprivateequity

teamsthroughoutAsiaPacificareproud

toplayourpartsupportingclientsacross

theend-to-endPEownershipcycleand

livinguptoDeloitte’spurpose:making

animpactthatmatters.

1.Preqin

2.Mergermarket

02

AsiaPacificPrivateEquity2024Almanac|Executivesummary

Executivesummary

TheyearAsiaPacificPEgrewup

Ayearwhenflatwasawin

2023wasachallengingyearforPE:sentimentwas

low,withanunusuallyhighnumberoffaileddealsand

transactionvolumesdown(buyoutinvestmentsdroppedfrom1,061dealsin2022to947in2023);processestooklongerandexitsremainedchallenging(US$60BcomparedtoUS$63Bin2022).3Butdespitethis,transactionvalueremainedeffectivelyflat(buyoutinvestmentsofUS$119BcomparedtoUS$109Bin2022)withalargeproportionreflectingportfoliomanagement.

Investorsmayhavehopedfor2023torepresentalong-awaited

returntonormalfollowingyearsofCOVID-19disruptions;

however,thatfailedtomaterialise.Infact,slowinggrowth,more

costlydebt,andfundraisingdifficultyhaveledmanytolabel

2023astheendofaneraforPEinAsiaPacific.Butinhindsight,

wemaylookat2023astheyearAsiaPacificPEgrewup.

Allbutthemostseasonedprofessionalsmaynowbein

unfamiliarterritory,dealingwithconditionstheyhavenot

encounteredbefore,butinmanywaystheAsiaPacificmarket

isbeginningtolookmorelikeitsmaturewesterncounterparts.

PEbuyouttransactionsarebecomingmuchmorewidely

acceptedinmarketswherepreviouslytheywerenot–Japan

Ahurdle-ratehandicapmoderatesvaluations

Whileoperationalperformancehasreturned,PEexit

valuationshavenot.Higherinterestratesandgreater

macro-environmentuncertaintyareeatingintothe

potentialreturnsforfinancialbuyers,whosetargethurdlerateshavenotchanged.Inevitably,higherfinancingcostsaredrivingbuyerstolowertheirpotentialentryprices,

effectivelyaddingahurdle-ratehandicaptovaluations.

andIndia–whileChina’sslowergrowthisdrivingafocuson

target-screeningcriteria,strongbusinessplansandoperational

improvementsthatare,ultimately,farmoresustainablethan

top-linegrowthandspeedtomarket.

Theemergenceofthenon-processsalesprocess

Withmanydealprocessesfounderingonthishandicap,PEfundsareemployingsofterbutslowerapproachestoassetsales–anddifferentkindsofdeals–toavoid

thepracticaldifficultiesandnegativeperceptionsthataccompanyafailedprocess.Thesedynamicsmayfavourbothstrategicsellers,forwhompriceisnottheonly

concern,andstrategicbuyers,whooftenrequiremoretimetocompleteadeal.Meanwhile,PEbuyers,can

makeuseoflessstringentprocesstimelinestoexplorecreativestructuringtohelpbridgethepersistentbid-askvaluationgapwithsellers,suchaspartialdealswith

earn-outs,synergieswithexistingportfolio,orhybriddebt/equitysolutions.

Slowinggrowth,morecostlydebt,and

fundraisingdifficultyhaveledmanyto

label2023astheendofaneraforPE

inAsiaPacific.Butinhindsight,wemay

lookat2023astheyearAsiaPacificPE

grewup.

3.Note:unlessotherwisenoted,statisticsthroughouttheAlmanacarebasedonDeloitteanalysis

ofmarketdata;additionaldetailsareprovidedinthe‘Marketstatistics’sectionbeginningonpage15

03

AsiaPacificPrivateEquity2024Almanac|Executivesummary

04

Thesubduedtransactionvolumeinthemarketcannotandwillnotpersistforever,andgreenshootsarealreadyshowing.Interestratesmayhavepeakedand,followingmorethan

ayearofsuppressedvolumes,theaccumulationofboth

drypowderandageingassetsispressuringGPstotransact.NewandcurrentinvestorsareunlikelytoinvestfurtherfundswhilePEhousessitonsuchsignificantstoresofdrypowderandswellingportfoliosofagingassets.Therearedealsto

bedone,drypowdertobespent,andvaluetobecreated–itwilljusttakeoperationalwork,bilateralnegotiations,andabitofcreativity.

Fundraisingstalematetoday:investment

opportunitiestomorrow?

Thefundraising‘stalemate’drasticallyreducedthenumber

offundsclosed(385)anddrypowderraised(US$63.2B)

forAsiaPacificPEfundsacrossstrategies(buyout,VC,

secondaries,fund-of-funds,andspecialsituations)–

aten-year-low.Thelongerthisstalematecontinues,the

morevintagesthatwillexistwithalimitedsetofbuyout

funds.ThiswillmeanthatasGPsmoveintoexitmode

fortheiroldervintagesintwo,threeorfouryears,there

maybemeaningfullyfewerfundsininvestmentmode

competingfordeals.

Divergingstrategies,butChinaexposurekeyto

agloballybalancedportfolio

InterestinChinaisatarelativelylowebb,atleastby

recentstandards,andPEinvestors’viewon,andstrategies

for,Chinahavebecomevariedanddivergent.Looking

ahead,thesamedenominatoreffectthatiscurrently

keepingLPmoneyawayfromPEfundstopreserve

asset-classdiversityinportfoliosmayservetopushLPs

backintoChinainordertopreservegeographicportfolio

diversity.Infact,manybelievethemarkethasalreadyhit

peakpessimismforChinaand,forthoseabletoinvestwith

conviction,thismaybeagoodtimetoputmoneytowork

there.Eitherway,investorswillnotbeabletoignorethe

world’ssecond-largesteconomyintheirglobalportfolios.

Operationsinthedrivingseatandmore-creative

routestoLPliquidity

Inthefaceoflowtransactionvolumesandthechallenge

inachievingsatisfactoryexitvaluations,PEfundsare

increasinglyfocusingondrivingvaluethroughoperational

improvementandfundingdividendsviamoreambiguous

liquiditystrategiesincludingcontinuationfunds,partial

exits,andstripsalesorportfoliosalestosecondaryfunds

orfund-of-funds.

AsiaPacificPrivateEquity2024Almanac|Marketinsights

05

Marketinsights

2023–aninflectionpoint

TransitioningtoamorematureAsiaPacificPEmarket

Followingyearsoflow-costdebt,supportivepublicmarketexits,andseeminglyever-increasingvaluations,thetide

begantoturninlate2022withadropinM&Atransactionvolumesthatcontinuedthroughout2023.Inmuchofthe

world,accommodativemonetarypolicyandgovernment

subsidiesthatsupportedeconomicactivitythroughout

COVID-19ledtostrongeconomieswithlowunemployment,butalsotorisinginflation,whichwasexacerbatedbysupplychaindisruptionsandheightenedgeopoliticalconcerns.

Inresponse,centralbanksraisedrates,resultinginmore-costlydealfinancingforPEfunds.

So,inthesamewaythattheworldeconomystruggled

toadjusttotheonsetofaglobalpandemic,ithasstruggled

toreturntonormalcycomingoutofapandemic.GrowthrateshavereturnedpostCOVID-19butappeartohavesettledlowerthantheywerepre-pandemic–particularlyinAsiaPacific.

Geopoliticaleventsaredisruptingmarketsandsupplychainsremainunderpressure.Whileinflationhaslargelyslowed,

thereisstillnoclearconsensusonwhenorhowquicklycentralbankswilllowerrates.Marketuncertainty,highfinancingcosts,andslowergrowthareallcombiningtomakeitachallenging

environmentforPEdealactivity.

Marketuncertainty,highfinancingcosts,andslowergrowthareallcombiningtomakeitachallengingenvironmentforPEdealactivity.

GDPgrowthbyregion,2014-2028E

7.0%5.0%3.0%1.0%-1.0%-3.0%-5.0%-7.0%

Average,24E-28E

4.1%

1.9%

2.3%

202120222023E2024E2025E2026E2027E2028E

2014201520162017201820192020

-AsiaPacificEuropeNorthAmerica

Source:IMF

AsiaPacificPrivateEquity2024Almanac|Marketinsights

Consideringthisbackdrop,manyPEmarketparticipantsandobservershavearguedthat2023markedtheendofaneraforPE.Globally,aperiodoflow-costdebtthatbeganfollowingtheglobalfinancialcrisis,hascometoanend,withthereturn

ofhighbenchmarkrates.IncertainpartsofAsiaPacific,thisiscompoundedbyslowinggrowthrates.China’sGDPgrowthwasestimatedtobe5.2%in2023;apartfromCOVID-19years,whichwereexceptional,thatisthelowestratesince1990.4

Thisleavestheindustryinanunusualpositionregardingtalent

andexperience,withallbutthemostseniorandexperiencedPEprofessionalshavingcuttheirteethandbuilttheircareersinacheap-debt,high-growthenvironment.Theseconditionshavedisappeared,andprofessionalsarenowfacinga

transitionfromgrowth-orienteddealsbackedbycheapdebttoinvestmentsthatfocusonoperationsandthatwilldeliverthecashflowneededtosupportcostlydebtpayments.

However,oncloserinspection,thisdoesnotlooklikethe

endofaneraforAsiaPacificPE.IncontrasttothewesternPEmarketsthatrelyheavilyonleveragedfinancetosupportdeals(TermLoanBorhigh-yieldbondfinancing),AsiaPacificPEfundsoftenutiliselocalbankfinancing,whichsomewhatinsulatesthemfromtheriseinratesseenglobally.

•WhiledifficultIPOmarkets(AsiaPacificIPOproceeds

dropped33%in2023)5andmacroeconomicuncertaintyreducedtransactionvolumesoverallinAsiaPacific(buyoutinvestmentsdroppedfrom1,061dealsin2022to947

dealsin2023),activityremainedstronginsomeplaces,notablyJapan(dealvalueinUSDandJPYupyear-on-year48.5%and68.5%respectivelyin2023),wherepublic-to-private,corporatecarve-outandbusinesssuccession

transactionsprovidedPEfirmswithampleinvestment

opportunities.Infact,thegrowingacceptanceofPE-

ownership–demonstratedbythesepubliccompany

transactions–canbeviewedasasignofamaturingPEmarket.Similarly,Indiaexperiencedasignificantincreaseinbuyoutdealvalue(up67.2%year-on-yearinUSDand102.4%inINR),anexpressionofthegrowingacceptanceofbuyouttransactionsinamarketthathashistoricallyskewedtowardsgrowthinvestments.

•Australiaexperiencedapivotawayfromsectorshighly

exposedtodiscretionaryconsumerexpenditureswith

greaterfocusonresilientsectorssuchashealthcareandeducation,orthosetiedtonewenergytransition–thoughrelativelyfewofthesetransactionsclosedoverthecourseoftheyear.

•Meanwhile,slowergrowthinChinahasdampenedsome

investors’appetiteintheregion.Butthisdoesnotmean

theendofinboundinvestment.Slowinggrowthisnatural

andexpectedofeconomiesastheyreachacertainscale;

theUSisthelargest,most-developedPEmarketintheworld,despitehavinglowergrowthandhigherinterestratesthanmanypartsofAsia.Aslower-growthenvironmentsimply

requiresmorestringenttarget-screeningcriteria,developingstrongbusinessplansandfocusingonoperational

improvementsratherthanafocusontop-linegrowthandspeedtodeploycapital,asisthefocusinahigh-growth

market.ThisshiftingrowthprofilecanthereforebeseenasapointofinflectionforhowPEfundsinvest,andanotherindicationofthematuringAsiaPacificPEmarket.

So,perhapswhatwearereallyseeingisnotsomuchtheendofaneraforAsiaPacificPEmarkets,butthebeginningofamorematurephaseinwhich,invariousways,they

arecomingtomore-closelyresembleandbehaveliketheirwesterncounterparts.

Activityremainedstronginsomeplaces,notablyJapan(dealvalueinUSDand

JPYupyear-on-year36.4%and54.9%

respectivelyin2023),wherepublic-to-

private,corporatecarve-outandbusinesssuccessiontransactionsprovidedPEfirmswithampleinvestmentopportunities.

4.China’sNationalBureauofStatistics

5.Dealogic

06

AsiaPacificPrivateEquity2024Almanac|Marketinsights

07

Ahurdle-ratehandicap

Samevaluations,differentproblems

2023waseffectivelythefirstyearofpost-COVID-19economicactivityinAsiaPacific.Chinaendeditszero-COVID-19policyinJanuary;JapanlifteditstravelrestrictionsinApril;and

KoreaendedinboundquarantinerequirementsinJune.

ForPEportfoliocompanies,thisledtoarollingoffoftheproformaadjustmentsusedthroughoutCOVID-19,as

operationalperformancereturnedtopre-COVID-19levels.

Overtheprecedingyears,manyGPsmadetheargument

thattheirportfoliocompanyvaluationsshouldremainsteadydespiterecedingcomparablepublic-marketvaluations.

Thisreflectedtheoft-espousedbenefitofprivateholdings–less-volatilevaluationswithnoneedtoconstantlymark-

to-market.Italsorepresentedaviewthattheimpact

ofCOVID-19onportfoliocompanyoperationswould

betransient,withoperationsreturningtopre-COVID-19levelsafterthepandemicended.Theprevailingview

wasthatportfoliocompanyvaluationswouldalsoreturn.

Unfortunately,thatviewwasonlypartlycorrect:most

companies’operationalperformancehasreturnedtoor

neartopre-COVID-19levels,butPEexitvaluationshavenot.

Instead,higherinterestratesandgreatermacro-environmentuncertaintyareeatingintothepotentialreturnsforfinancial

buyers,whosetargethurdlerateshavenotchanged.With

thepossibleexceptionofJapan,wherefinancingisrelatively

inexpensive,hittingthosehurdleratesisincreasinglydifficultatpre-COVID-19valuations.Carryinghigherfinancingcosts

andinvestingintoamoreconservativebusinesscaseinevitablydemandsthatbuyerslowertheirentryprice,effectivelyaddingahurdle-ratehandicaptovaluations.

KeyAsianexchangeindices,2014-2023

400

350

300

250

200

150

100

50

0

2014

HKEX

20162017

Nikkei225Index

2024

2015

KOSPI

2023

20182019202020212022

-S&PBSESensexIndexShanghaiSEComposite

Source:Refinitiv

AsiaPacificmediansponsor/tradeexits,2014-2023

30

20

10

21.1

13.0

11.8

20142015

-EBITDAMultiple

2021

2022

2023

20162017201820192020

-EBITMultipleEarningsMultiple

Source:Mergermarket

AsiaPacificPrivateEquity2024Almanac|Marketinsights

08

Amorphoussalesprocesses

Hesitanttolaunchandlongertoclose

Overthepastfewyears,PEassetsaleprocesseshavefacednumerousheadwinds:COVID-19,geopoliticalshocks,supplychaindisruptions,currencymovements,increasedinterestrates,andbid-askvaluationgapstonamejustafew.Deloitte’sanalysisofAsiaPacificPEdealsinmarketsuggeststhatat

least50processesforPEassetswerepulledorpausedin2023asaresultofthesedynamics.

Inthefaceofthisuncertainty,manyPEsellerswere

unconvincedthatlaunchingaformalsell-sideprocesswouldresultinabindingbidatavaluationthattheycouldaccept.

Asaresult,PEsellersandtheirsell-sideadvisorsshiedaway

fromtraditionaltwo-roundprocessesandincreasinglyused

anewtactictoavoidfaileddeals:not‘launching’adeal.Instead,throughout2023manydealsstartedasinvestmentbanks

andsellers‘softsounding’,‘testingwaters’orconducting‘earlydiscussions.’Andwhendealsdidstartinearnest,therewas

oftennosettimelineordefinitiveprocessletter.Inthisway,

processesin2023functionedmorelikebilateral–ormore

accuratelymulti-lateral–negotiationsbetweensellerand

buyer(s).WhilePEsellersstillhadloftyvaluationexpectations,theyvalueddiscretionfrompotentialbuyerstopreventtheirassetsbeingtaintedbya‘failedprocess’.Theresultwasmanypro-longprocesses,withsomedraggingonforsix,nine,oreven12monthswithoutresolution.

However,forstrategicsellers,particularlyfoundersor

corporatessellinganassetduetomanagement-successionissues,itwasadifferentstoryandpricewasnottheonly

concern.ThiscategoryofsellerwantstounderstandhowPEfundscanimproveandgrowthebusiness,toprovidecomforttoemployeesandotherstakeholders,suchassuppliers,

customersandthewidercommunity.Unencumberedbyastrongvaluationexpectation,theriskofafailedprocessislowerforthesesellers.Asaresult,Japan,whereitis

estimatedthatasmuchas60%ofPEdealsaredrivenbysuccessionissues,continuedtoseeastrongpipelineoftraditionalprocessesin2023.

Theslower-paceddealenvironmentforportfoliocompanysalesislikelytocontinuein2024andmayfavourstrategic

buyers,whooftenrequiremoretimetocompleteadeal.

Meanwhile,PEbuyers,canmakeuseoflessstringentprocesstimelinestoexplorecreativestructuringtohelpbridgethepersistentbid-askvaluationgapwithsellers,suchaspartialdealswithearn-outs,synergieswithexistingportfolio

companies,orhybriddebt/equitysolutions.

Reported/rumoredreasonsforfailedprocesses,2023

Dealterms

Management

change(buyer)

Valuationgap

Newbidder

Poor

performance

Regulatory

PursueIPO

Lackof

interest

Source:DeloitteAsiaPacificPEOpportunityPipeline

AsiaPacificPrivateEquity2024Almanac|Marketinsights

09

Portfoliomanagementandflexible‘exits’

Operationsandliquidityarethenewinvestmentsandexits

Inthefaceoffewertransactionsandaperhapsunderstandableunwillingnesstoexitatmarketvaluations,PEfundsturned

theirattentiontooperationsthroughouttheyear.Thisshiftinfocuswasreflectedbyanincreaseinboltonactivity,changestoportfoliocompanytalent,andagreaterproportionofdeal-teamtimebeingspentonportfoliosratherthannewdeals.

Infact,whiletheAsiaPacificmarketforbuyoutinvestments

appearedtoremainflatin2023atUS$116B(vs.US$109B

in2022),alargeportionofactivitywasportfoliorelated.

FiveofthetenlargestAsiaPacificbuyoutinvestmentsin

2023featuredsomeelementofportfoliomanagement–

boltons,sellingbetweenaGP’sownfunds,and/orpartialsales.

AsiaPacificPEstrategiesto‘navigatethedownturn’

Expandingoperatingcapabilities

Accelerateinvestments

Addonacquisitions

Focusingonnon-cyclicalsectors

Makeminority/otherequityinvestments

Utilisingearn-outs

DedicatecapitaltoDistressed/SSdeals

Slowdown/decelerateinvestments

Portfoliodiversification

0%10%20%

Source:Dechert–2024GlobalPrivateEquityOutlook

ThetoughIPOmarketandvaluationmismatcheshavedrivenachangeinGPmindsetsaboutexitsaswell.LPscontributecapitalwhentheGPacquiresacompanyandissuesacapitalcall.Theygettheirinvestmentbackthroughdistributions

topaid-incapital(DPI),typicallyasdividendpaymentsand

proceedsfromthecompany’ssale.Withrisinginterestrates,dividendrecapitalisationsaredifficultandcostly,leaving

portfoliocompanysalesastheprimarywaytoreturncapitaltoLPs.However,inachallengingexitmarket,theonce-

straightforwardideaofsellingassetstoreturncashtoLPs

hasmorphedintoalarger,moreambiguoussetof‘liquiditystrategies.’InanefforttoreturncapitaltoLPs,PEfundshaveemployedarangeofcreativemeanstogenerateliquidity

outsideofthetraditionalsaleofIPO,suchas:

•Continuationfundstoextendtheownershipperiodof

individualassets,forexamplePEP’ssingle-assetcontinuationfundforUpEducation,anassetheldsince2015,orEQT’s

transferofVistraintoitslatestfundviamergerwithTricor.

•Partialexits,whichretainvaluationupsidewhilepartially

monetisingforLPs,forexampleAffirmaCapital’spartialstakesaleinTBOTektoGeneralAtlantic,orBain’spartialsaleof

WorksHumanIntelligenceinJapan–whichalsotransferredBain’sholdingintoitslatestfund.

•Stripsalesorportfoliosalestosecondaryfunds/funds-of-fundstobalanceliquidityneedswhilecapturingfurtherupsideintheassetsowned,forexampleCollerCapital’sinvestmentinLegendCapital’shealthcareassets;asmoreGPsexplorethisoption,weareseeingcontinuedgrowthintheemergingAsiaPacificsecondariesfundmarket.

AsiaPacificsecondariesassetundermanagement(US$B),2014-Jun2023

30

25

20

15

10

5

0

US$24B

Dec2021

Dec2022

Jun2023

DecDecDecDecDecDecDec

2014201520162017201820192020

DryPowderUnrealisedvalue

Source:Preqin

AsiaPacificPrivateEquity2024Almanac|Marketinsights

10

Fundraisingfrustrations

AGP-LPstalemate,withpotentialrepercussions

Ifyouwerelookingforacatchphrasetoepitomise2023PEfundraising,itmighthavebeen‘recycledcapital’or‘DPI’ormaybe‘denominatoreffect’.Butinreality,itwas‘stalemate’.

ReducedpublicmarketvaluationsresultedinLPover-exposuretoPE–thedenominatoreffect.And,ratherthanrebalance,

manyLPsoptedtomaintaintheircurrentportfolioexposuretothePEassetclass,notputtingnewmoneyinuntilthe

moneytheyalreadyhadinvestedinPEfundswasreturned–recyclingcapital.But,inordertoputexistinginvestment

moneybacktowork,LPsneedtogetdistributionsfromtheircurrentfundinvestments–DPI.Theresultwasastalemate

infundraising,withLPswaitingfordistributionstoreinvest

andGPswaitingforexitconditionsintheIPOandM&AmarketstoimprovebeforetheysoldassetsandgaveLPsthoseeagerlyanticipateddistributions.

Ashasbeenwidelyreported,growthandVCfundswere

thehardesthit,down~78%incapitalraisedfromthree

yearsago.Butbuyoutfundsalsofeltthesqueeze,with

manyfundsreducingtheirtargetsizeandLPsconcentratingtheirlimitedinvestmentsintowell-known,establishedfunds.BuyoutfundsraisedjustUS$20.6Bin2023,thelowestsince2018,anddown48%year-on-year.Infact,thetwolargest

fundsthatclosedin2023(BainCapitalAsiaVatUS$7.1BandPrimaveraCapitalFundIVatUS$4.1B)represented

54%ofthetotalbuyoutfundsraisedinAsiaPacificin2023.Thedifficultyinfundraisingcanalsobeseenintheaveragetimefundsareinmarket,whichisataten-yearhighof

20+monthsfromlaunchuntilfinalclose.

Thetwolargestfundsthatclosedin

2023(BainCapitalAsiaVatUS$7.1BandPrimaveraCapitalFundIVatUS$4.1B)represented54%ofthetotalbuyout

fundsraisedinAsiaPacificin2023.

AsiaPacificPEbuyoutfundraisingtimespend(numberofmonths)

25

22

20

15

10

5

0

2014201520162017

Averagenumberofmonthstofirstclose

2018201920202021

uAveragenumberofmonthstofinalclose

2022

2023

Source:Preqin

AsiaPacificPrivateEquity2024Almanac|Marketinsights

11

Oneofthebrightestspotsin2023waslocalcurrencyfunds–particularlyfundraisingforRMBvehicles,withmoreGPsraisingRMBfundsforglobalinvestments.However,thismayrepresentshiftingsentimentingeopoliticsratherthanalastingchange

infundraisingdynamics,becauseGPstargeting‘China-for-China’investmentsarecreatingdedicatedlocalRMBfundstocomplement,ratherthanreplace,theirmainUSDfunds.

Whilethedifficult2023fundraisingmarkethasbeen

widelyreportedonandobserved,theremaybelonger-term

repercussionsthathaveattractedlessattention.Thetypical

PEfundmayhavea~7-10-yearlife,buttheinvestmentperiodcanbemuchmorelimitedsince