Asia Pacific now accounts for 25% of the global private equity market, with $833 billion now under management in the region. The market share has grown considerably since 2007, whereby the region occupied just 5% of the global PE share.
By consequence, Asia Pacific is drawing attention from companies across the globe, looking to invest in the region. Most notably, China is receiving the most funding, where the internet and technology sectors have formed a new burgeoning economy. The sectors have accounted for 85% of growth within the region since 2010.
India has also enjoyed growth and observed the highest increase in investment since 2018. International investors are targeting both tech and internet companies – both of which account for half of the deals closed in India throughout 2018.
With such powerful momentum in these sectors within the PE market in Asia-Pacific, the opportunity is lucrative for fund managers. At the same time, hedge funds have been enjoying double-digit returns due to a China rebound. Data group HFR records that this year, funds have jumped by 16.9%.
Though, fund managers have been reviewing the rise with caution due to ongoing disputes between Beijing and Washington regarding technology and trade. That said, talks between Donald Trump and Xi Jinping resumed at the G20 summit and further trade talks have been confirmed. As a result, complications may start to ease up and managers may enjoy positive returns from Asian markets.
In order to capitalise on this new economy for funds, managers must comprehend how different the Chinese market is in comparison to other parts of the world. Advanced analytics are a powerful strategy for fund managers to attain thorough insights for the region. A solid understanding of the market will enable managers to fully assess the risks and opportunities for portfolios.