Asian investors play big role in US$30 billion fund for secondary private equity market

Investors are paying more attention to secondary PE market amid global volatility and liquidity crunches

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Jason Yao, head of Greater China at Ardian. Photo: Handout

Published: 9:30am, 31 Jan 2025

Asian investors played a major role in contributing to a US$30 billion fund focused on opportunities in the secondary private equity market, as they pay greater attention to such assets amid global volatility and liquidity crunches.

Paris-based Ardian, a private equity firm, said Asian investors contributed 24 per cent of the money that went into its secondary fund, the world’s largest. That tripled Asia’s commitment size from Ardian’s previous fundraising in 2020, which closed at US$19 billion. Secondary funds, according to Morgan Stanley, purchase existing interests or assets from primary private equity fund investors.

Market volatility in recent years has prompted some fund investors to sell their private equity holdings as their allocations have exceeded preset thresholds due to declining values in other public market assets, while some listed companies want to realise gains by selling their holdings in certain funds to relieve stress in their core businesses, said Jason Yao, head of Greater China at Ardian.

Sentiment among buyers is high too. “Private banks and family offices now account for higher percentages in our Asian diversified limited partner base,” said Yao. Limited partners are fund investors who have no management authority. Ardian managed or advised US$176 billion in assets including Chinese e-commerce service provider Leqee and Kangji Medical, a maker of surgical instruments, according to its website.

“There are a lot of family offices set up in the region,” he said. “Some of them are very sophisticated, with staff coming from institutional investors covering the global market, and they understand the value of the secondaries.”

Ardian did not disclose the names of the Asian investors in the latest fund. Yao said insurance companies were particularly enthusiastic. At least 40 investors in the latest fund were from the Asia-Pacific region, more than four times the tally from Ardian’s previous fund.

The secondary market is a good starting point for many Asian investors who are new to private equity because of its accelerated liquidity turnover, Yao said.