Preqin: Asia-Focused PE Fundraising Falters For Second Straight Year In 2016

Jan 27 2017 | 12:06am ET

Asian-focused private equity fundraising faltered last year, as buyout, growth and venture capital all saw fewer funds closed and less capital raised for the second straight year, according to new research from alternatives industry data provider Preqin.

Preqin’s 2016 Fundraising Update found that 148 Asia-focused private equity funds raised a combined $40 billion during last year, down from 214 funds that raised $51 billion in 2015 and 226 funds that raised $65 billion in 2014. Buyout fundraising fell by 21% from 2015, and growth fundraising fell by 58%, the company said.

Other key highlights from Preqin’s report: 

  • Venture Capital: Despite slight declines in both fundraising and deal-making activity in the region, Asia continues to vie with North America as the most active venture capital market in the world. China, India and Japan are in the top five countries with the highest number of active fund managers, and China in particular has accounted for a growing proportion of global venture capital deal activity over recent years. 
  • Buyouts: In the context of the global private equity buyout market, Asia has seen its significance decline in recent years. Funds focused on Asia accounted for just 7% of total buyout fundraising in 2016, its lowest share since 2012. Additionally, the total value of buyout-backed deals in the region fell by 55% compared to 2015, with 257 deals taking place worth a combined $24 billion. 
  • Investors: Asia has long been viewed as a key growth market for the private equity industry, and Preqin’s year-end investor surveys reflect this. The three regions most investors cited as presenting the best opportunities in 2017 were emerging Asia, China and India. However, despite the deceleration of economic growth in China and the Bank of Japan’s adoption of negative interest rates, parts of the continent are still only just starting to explore private equity investment: Asia-based investors account for just 13% of the global private equity investor universe at the start of 2017.

Founded in 2003, Preqin is a leading source of information for the alternative assets industry, providing data and analysis via online databases, publications and bespoke data requests. More than 40,000 professionals in 90 nations use the company’s products.

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