Update on private capital in Asia

Preqin have a comprehensive report on private capital in Asia.  

The total Asia-Pacific focused private capital assets under management in Asia over the 2000-20 period, with $1.71 trillion in AUM as on end-September 2020.

As can be seen, the vast majority of AUM is private equity and the AUM of infrastructure funds is tiny. The infrastructure dry-powder too is very small, though the total dry powder available to deploy is $446 bn as on April 2021.

Private debt while growing fast is relatively small, with an AUM of just $59 bn as on September 2020. Infrastructure funds too form a small share of private capital in Asia.

The Asia-Pacific focused unlisted infrastructure fund raising is tiny, in the annual range of $4-6 bn in recent years. This is instructive,

Annual infrastructure fundraising in Asia-Pacific peaked in 2014 at $15bn, and plateaued for the following three years (Fig. 5.2). It fell back significantly into 2018, with a 50% drop in the number of funds closing and a 42% decline in capital raised. While fund closures bounced back in 2019, capital raised continued to fall – the average size of funds closed that year was $246mn, less than half of what it was in 2017.

This is the latest confirmation of the limited amount of Asia-focused private capital willing to invest in infrastructure. This too would be distorted by the disproportionate share that would be prioritising renewables within infrastructure itself. 

Healthcare, information technology, financial services, and consumer discretionary sectors formed the vast majority of PE investments in India. The share of industrials, including manufacturing, has declined over the years from being the biggest in 2008 to a very small share by 2021.

Similarly, on the venture capital side, information technology, consumer discretionary and financial services made up the vast majority of PE investments.