Venture capital funds focused on South East Asia have raised $500 million in the first half of the year, while buyout and growth funds have already matched 2018’s total, a report by alternative assets tracker Preqin said.
ASEAN-focused venture capital fund-raising hit a record in 2018 with 17 funds securing $0.9 billion. In 2019 so far, six funds have secured another $500 million, putting 2019 on course to match the previous year, the report said.
There are 70 ASEAN-focused funds currently in market, targeting an aggregate $8.5 billion in capital. A large proportion of the interest in the region comes from international investors – 84% of the known investors in ASEAN-focused funds are based outside the region.
“Southeast Asia presents a wealth of opportunities to private equity and venture capital investors, and clearly many of them are starting to take an increased interest in the region. With several large cities on the global stage, and governments that are encouraging entrepreneurship and technological innovation, these countries make fertile ground for venture capital investment in particular.
But the fractured regulatory environment can pose a challenge for investment, and investors characterize it as ‘diverse’, ‘fragmented’ and ‘segmented’.
Alongside that, political uncertainty in some corners may be putting a brake on larger scale buyout investment, and it remains to be seen whether domestic investors will turn to the asset class in greater numbers.
However, as investments and appetite are increasing in the region the future seems bright for ASEAN private equity," said Ee Fai Kam, Head of Asia Research & Operations, Preqin.