What Is the APAC Limited Partner Outlook in 2021? [Video]
Highlights from our panel exploring where alternative investments in the region are heading in the next 12 months.
25 January 2021
In the wake of the global economic disruption and health crisis caused by the coronavirus pandemic, Asia-Pacific (APAC) has been able to readjust faster than most regions, with alternative investments stirring the appetites of general partners (GPs) and limited partners (LPs) alike.
China, the “giant” of APAC, has emerged from its COVID-19 crisis better — and faster —than the rest of the world.
So what does that signal for LPs and GPs into 2021?
To get insights, I had the pleasure of moderating a roundtable of experts for “APAC Limited Partner Roundtable and Outlook into 2021” during the SS&C Intralinks Alternative Investments Global Virtual Summit where I was joined by Dong-Hun Jang, chief investment officer of Public Official Benefits Association, Korea; Ben Rudd, chief investment officer of Prudential; and Stuart Schoenberger, managing director of CDH Investments.
Attractive asset classes in APAC
After an investor shift from private equity (PE) and private credit funds in 2020, I asked about some of the asset classes for which managers have shown an appetite going forward. Real Estate — with some emphasis on residential and multifamily — and Infrastructure came up repeatedly. “We also have an eye on opportunistic investments in secondary markets such as distressed assets and credit areas,” said Jang, whose organization manages KRW 15 billion AUM.
For investors coming to China, the most exciting area is the domestic consumption upgrade and the growth that comes from that, notes Schoenberger. China is also attracting foreign investors: Its government bond market is the only one trading at a positive yield as the region also shows up as the emerging leader in clean energy, electrical and ESG (Environmental, Social, and Corporate Governance).
Post-pandemic GP-LP challenges
One common theme in our roundtable was communication between GPs and LPs. It seems the past year proved very tough in having the channels open to deploying capital into the private market. Even with dry powder available to invest in opportunities, the limitations on travel made dealmaking a challenging proposition in many instances.
Schoenberger expressed the importance of making sure LPs understood how companies were being impacted by COVID-19, and how it affected potential returns. “We looked at what we were doing as a fund manager to help our [portfolio] companies manage through changing times.”
Said Rudd: “Forming a stronger relationship with the underlying managers through more direct involvement is important.”
My sincere thanks to all of the panelists for their participation and offering their considered thoughts.
You can watch the discussion in its entirety below.
Adrian leads SS&C Intralinks’ alternative investments business in North Asia. Leading a team dedicated to addressing the needs of alternative investment managers, Adrian facilitates the fundraising, fund reporting and transactional activities of private equity, venture capital, hedge and real estate funds of all sizes, strategies and vintages across the region.