-
FOREWORD
THE FUNDS MARKET IN ASIA IS MATURING FAST. THIS INSIGHT LOOKS AT THE EVOLUTION OF FUNDS FINANCE IN ASIA AND THE CHANGING DEMAND DYNAMICS OF THE REGION.
Initially, capital call facilities were offered as relationship deals for real estate funds when key Asian fund sponsors began diversifying away from traditional equity stocks and bonds in 2008.
Since then ANZ’s Global Funds and Insurance team have structured a broad range of financing solutions for funds in Asia and other regions. These include specialty funds and sponsors, including infrastructure, private debt and other specialty private equity funds.
The funds market in Asia is maturing fast and we are now working with a number of Asian-based funds to support their intra-Asian and global investment strategies.
KEY TAKEAWAYS
The evolution of financing facilities used by Asian funds is reflective of several factors:
- Asian investors are more exposed to the sophisticated funds finance markets of North America and Europe via the fund’s general partners (GPs).
- GPs take longer to find suitable assets and need to be quicker, in the face of competition, when opportunities present.
- In the wake of the GFC, funds families are implementing measures to improve fund performance and reduce liquidity risks.
- Alternatives are being sought to carrying a low yielding liquidity portfolio.
- Funds finance is seen as a cheaper alternative to asset or company level finance to enhance investment.
Demand dynamics are changing in the Asian market:
- Long-term macro trends of urbanisation, industrialisation and the rising middle income class are attracting investor attention.
- Total fundraising for Asia-focused funds has dropped off since 2011. For example, China-focused fundraising dropped to a five-year low in 2014 of $20b through 49 fund closures.
- Asia remains a source of fundraising for global private equity funds.
- While much of Asia Pacific investors’ allocation is directed intra-regionally, increasingly the investment mandates are expanding to reduce concentration risks and access the world’s highest yielding investments.
Li Min Lam
Commercial Property Funds, Asia
Financial Institutions Group, ANZMark Harding
Director, Funds
Financial Institutions Group, ANZFor a full set of relevant disclosures, please visit the link below.
Share
This publication is published by Australia and New Zealand Banking Group Limited ABN 11 005 357 522 (“ANZBGL”) in Australia. This publication is intended as thought-leadership material. It is not published with the intention of providing any direct or indirect recommendations relating to any financial product, asset class or trading strategy. The information in this publication is not intended to influence any person to make a decision in relation to a financial product or class of financial products. It is general in nature and does not take account of the circumstances of any individual or class of individuals. Nothing in this publication constitutes a recommendation, solicitation or offer by ANZBGL or its branches or subsidiaries (collectively “ANZ”) to you to acquire a product or service, or an offer by ANZ to provide you with other products or services. All information contained in this publication is based on information available at the time of publication. While this publication has been prepared in good faith, no representation, warranty, assurance or undertaking is or will be made, and no responsibility or liability is or will be accepted by ANZ in relation to the accuracy or completeness of this publication or the use of information contained in this publication. ANZ does not provide any financial, investment, legal or taxation advice in connection with this publication.