Global private investment offerings are expanding beyond initial early-stage funds to include products such as growth-stage and thematic funds to meet the diverse needs of investors.
According to Emma Norchet, a senior executive with US asset manager T. Rowe Price Group, institutions began to boost investments in private assets through secondary markets in 2022 as initial public offerings slowed.
“Secondaries have been one of the big trends in the private market,” Norchet, a partner in T. Rowe Price’s private opportunities fund investment committee and a member of the centralised private equity team for the US equity division, says in an interview with Asia Asset Management. “Many private companies are conducting private fundraising not because they need the capital, but because they require liquidity to retain their talent.”
She says more private managers are consolidating their early-stage venture funds to build a multi-stage investment platform that includes growth-stage and large-stage funds as their clients seek better returns and lower risk exposure.
While the Asian private investment market is less developed than in the US, she says it’s progressing “fairly well” in individual markets like Hong Kong, China and Southeast Asia. For instance, there is growing demand for China-focused tech thematic funds offered by local venture capital managers in Hong Kong.
In Southeast Asia, many early-stage venture funds are gaining traction among institutional investors in Thailand, Indonesia, Malaysia and Singapore. “They tend to be much more early-stage as there hasn’t been as active an IPO market within the local financial ecosystems,” Norchet explains.
She observes that investors in Asia have a strong preference for artificial intelligence companies, especially those focusing on large language models in the US, to tap into high-growth opportunities driven by technological disruption.
Baltimore-based T. Rowe Price has around US$1.89 trillion of assets under management.
