Asia’s non-public markets, notably the secondaries phase, are primed for sturdy progress as constrained provide, enticing pricing and enhancing liquidity present recent tailwinds, mentioned senior executives at Hamilton Lane.
Whereas secondaries nonetheless make up lower than 1% of Asia’s non-public market, Juan Delgado, co-chief govt of the US-headquartered funding agency, factors to the rise of Asian capital, the rising sophistication of the area’s non-public markets gamers and an increasing pool of mature belongings.
“We’re very bullish on the (secondary) market. Asia can provide progress at entry value relative to Europe and the US,” Delgado informed The Korea Financial Every day in a current interview in Seoul.
“Valuations are extra affordable than the US throughout each home and export-oriented methods.”
The area’s range, depth of the market and increasing intra-Asia commerce flows are additionally drawing world traders.
Asia’s secondary market has delivered among the highest returns amongst all of the completely different methods globally.
With $1 trillion in belongings beneath administration and supervision, Hamilton Lane participates throughout a variety of secondary transactions, together with by major offers, in addition to continuation autos.
Its platform technique as a number one investor throughout the spectrum of the asset class offers the agency sturdy entry to knowledge and relationships, enabling it to safe high-quality secondary offers at enticing valuations amid constrained provide.
ASIA’S COMPELLING GROWTH STORY
Asia nonetheless represents solely 10% of worldwide non-public markets, half the share of Europe, which stands at 20%.
However the area’s non-public fairness market may be very numerous from enterprise capital in India to buyout methods in developed nations like Japan, mentioned Hartley Rogers, govt co-chairman of Hamilton Lane.
“There’s an enormous vary of various sorts of actions that make up the non-public fairness market,” he mentioned through the interview.
In developed Asia — Japan, South Korea and Australia — secondary offers are usually extra buyer- and equity-oriented. Investor urge for food stays sturdy for core sectors resembling home shopper corporations, healthcare, industrials, enterprise providers and expertise corporations.
In China, newer and fast-growing sectors resembling renewables, electrical autos and batteries are enticing, alongside home shopper performs like leisure and healthcare.
In growing Asia, notably Southeast Asia and India, Hamilton Lane is discovering alternatives in enterprise capital and rising secondary markets.
“Nascent enterprise capital business in India has been very, very attention-grabbing. It is gone very quick and a few superb exits. Secondaries have been enticing in measurement, each in India and China,” Delgado mentioned.
Hong Kong, one of many best-performing inventory markets this yr, can be gaining traction from a strong pipeline of preliminary public choices extending into the primary half of 2026 and enhancing exit alternatives.
“Lots of M&A is taking a look at Asia strategic acquisitions. Exit offers are anticipated to extend in Asia. Asia is now a shiny spot for liquidity,” he famous.
OWNERSHIP TRANSITION
The possession transition of family-run companies is anticipated to drive M&A exercise in Asia.
China is getting into its first wave of generational possession transfers in its industrial sector, a shift that mirrors transitions already beneath method in Japan and South Korea.
“Most of the nice corporations in China in the present day have been began 30 years in the past, or 25 or 35 years in the past …They’re getting into the part of a first-time generational transition,” Delgado defined.
EXECUTION, CYCLICALITY
Regardless of the upbeat tone, execution stays the most important hurdle throughout Asia’s non-public markets, with native regulatory complexities, greater prices of operations and restricted exit alternatives in some nations.
Cyclicality presents one other problem, with sure markets experiencing faster and shorter funding cycles.
Nonetheless, the area is gaining momentum from recent capital inflows as regional funds more and more search funding alternatives inside neighboring markets.
As an example, Delgado mentioned Singaporean capital is displaying rising curiosity in Korea and India.
Globally, co-Chairman Rogers mentioned the US non-public fairness market stays sturdy, including: “There’s been a particular pick-up in M&A exercise within the US as properly.”
The US nonetheless accounts for about 70% of worldwide non-public fairness exercise, whereas contributing 25% of the worldwide gross home product.
“However all of that’s altering now. I do not suppose the US will probably be 70% of personal markets in 10 years from now,” Rogers added.
