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Asia’s “Burnt Capital Market” needs a catalyst to start it, said an expert in a CNBC Alpha event delivered last month.
The solution to have more listings in Asia implies having more products, information, fund managers and even good issuers, according to Jenny Lee, founder and partner senior manager of the Risk capital firm based in Singapore, Granite Asia.
The risk capitalist said that having a “OPI Taylor Swift”, in the region, will also help, referring to a possible acceleration in the OPI market for the list of a prominent company.
Lee is optimistic about how private companies will perform in 2025 after what calls a “terrible year” in 2024. She attributes this possible collection to the solid foundations of private companies and an opening in the listed windows.
The high interest rates in 2024 meant that the OPI window was “relatively closed” in mature markets such as the United States, China, Hong Kong and several parts of Asia, excluding Japan and India, said Lee. The many elections held in 2024 also increased uncertainty about how economies will work, he added.
Compared to 2023, OPI’s activity of Asia decreased even more by 2024. A 35% drop in agreements and 51% in income year after yearAccording to EY data.
Even so, there were some brilliant points in the region. India saw 327 listings, the highest number in the main OPI markets. Other Asian markets, such as Japan with 84 and South Korea with 75, also saw a substantial activity of OPI, showed the same data.
Serena Tan, executive and co -founder director of Gaia investment partners based in Malaysia, sees Alpha in “high growth” areas within Asia, such as health technology and preventive care.
Alpha, in the context of markets, refers to the ability to generate a higher capital yield.
About $ 2.3 billion will be spent on health services in 2026, he added so. The sector is likely to grow because One in four people in the Asia-Pacific region will be at least 60 years old by 2050They showed data from the Asian Development Bank.
Speaking at the same event that reads, he said that the Asian funds will raise $ 30 billion in private capital in Asia this year, led by companies such as Black stone, Kkr and EQT. A significant amount of capital It will probably flow to India and Japan, he said so.
However, it is still important to monitor China and the opportunities that will arise from global dislocation, he explained.
Global dislocation arises from events such as leadership changes or technological advances. In today’s context, examples include The threat of rates of the president of the United Statesand Startup China Depseek’s Launch an artificial intelligence model that costs only millions to train.
Invert in private markets
Private market assets, such as private capital and risk capital, are considered less volatile than public markets and offer long -term constant returns, so told CNBC separately.
“Investors must invest through the life cycle and the growth of companies, from private to public. If investors want to experience growth, they need exposure in private markets,“He said.
These private investments in Asia provide an internal rate of constant yield from 10% to 20%, depending on the investment strategy, geography and industry, he added.
There are 140,000 private companies with annual revenues exceeding $ 100 million, compared to only 19,000 public companies that collect in the same amount, he said. “It is a silly proportion, but that is because there is a limited benefit for companies to become public today if they do not need capital or the center of attention.”
According to Tan, the opportunities in the private capital space of Asia are found in small and medium players in all industries, ranging from waste recycling companies to packaging manufacturers, according to Tan.
