MAS names sustainability head; Malaysia’s EPF appoints COO and CFO; GIC PE head for SEA leaves; State Super hires new exec; Hesta appoints chief growth officer, chief Debby Blakey appointed to corporate governance board; ex-BlackRock exec joins IQ-EQ in Singapore; HSBC AM builds direct real estate team; ex-Vanguard head of distribution joins LGIM; Sanne names Singapore head; and more
Investor appetite for private equity has been buoyed by the returns yielded by buyout funds - however investors are cognizant that going forward aggressive leverage will reduce returns from buyouts in traditional markets of North America and Europe. Investors expect that Asia-Pacific buyouts will offer the most attractive investment opportunities in the next 12 months. The development marks the first time since the Barometer was launched that European buyouts have not emerged as the most attractive investment opportunity. This also perhaps represents an accurate reflection of how the centre of gravity for the private equity world is moving eastwards. Interestingly, enthusiasm for Asia-Pacific buyouts is shared by investors worldwide with about half the investors surveyed in each region sharing the bullish assessment of Asia-Pacific buyouts.
The other area investors are optimistic on is ôtake privatesö with 75% of investors expecting to witness increased activity. Investors are increasingly willing to invest directly in funds launched by private equity fund managers. A growing category of investors is even willing to directly invest in private companies, either alongside the fund or on their own. Investors plan to sell more assets in the secondary market as part of a more active approach to managing their portfolios. Two thirds expect secondary sales to increase in the next three years.
Amidst all the euphoria is also a word of caution. Investors are becoming more demanding of the funds they invest in and less willing to invest in follow-on funds if they are not satisfied with performance.
Jeremy Coller, chief executive of Coller Capital (which is a leading investor itself in private equity) says: ôWe have only begun to experience the difference private equity will make to the world economy. Through this young asset class, institutional investors are allocating capital to some of our most dynamic companies û and, increasingly, they are doing so independent of their own location and of companiesÆ ownership structures. There will be much more to come û we are still in the opening chapters of the private equity story.ö
Investors still favour private equity assets for their higher growth, better governance structures, and diversification potential.
The recent focus on greenwashing has put bond issues under greater scrutiny. However, some market participants believe this risks paralysis by analysis.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.