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Alternative Market Briefing

AsiaPac private equity and venture capital dry powder surge 291% in the past decade

Tuesday, June 22, 2021

Laxman Pai, Opalesque Asia:

Asia-Pacific-based private equity & venture capital dry powder has increased by 291% in the past decade, reaching a record high of almost $343bn as of April 2021, said Preqin. This correlates directly with an increase in allocations to the asset class, alongside private debt and real estate.

Asia-Pacific leads the growth of the global alternative investment industry globally. Private capital industry assets under management (AUM) based in the region have expanded more than eightfold in the past decade to reach approximately $1.6tn as of September 2020, Preqin data shows. Almost 73% of private capital fund managers in Asia-Pacific are operating out of China, Hong Kong, Japan, and Korea.

Asia-Pacific will continue to solidify its lead in driving global growth in alternatives over the next five years. Preqin recently forecasted that AUM based in the region would grow from $1.6tn in 2019 to almost $5tn in 2025, at a world-beating CAGR of 25.2%, which is more than twice the estimated growth rate of 9.8% for global private markets.

Asia-Pacific-based private debt AUM more than doubled from $28bn in 2017 to $59bn in 2020, as funding needs for Asian businesses accelerated after banks tightened their lending requirements and governments withdrew from liquidity programs.

China's desire to become the world's most important force for innovation by 2035 and to out-innovate Silicon Valley by 2025 are driving rapid growth in sectors such a......................

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