The Asia Pacific Region Is Leading the World in Raising Capital
The world is increasingly looking towards Asian markets when it comes to raising capital. In 2018, the Asia pacific region set new records as the deals made across this region hit record numbers. This was accompanied by a record high in exit values. Asian markets have been performing tremendously well over the past decade compared to their western counterparts.
Recently, momentum has largely shifted towards economies such as China and India from their South East Asian peers. The Chinese and Indian economies gracefully braced the 2008 financial crisis and pulled through with relative ease. This bred more confidence in the Asian markets and they have grown to become key pillars of the global economy.
Naturally, China and India led the way in deal making last year. The two Asian giants alone made up 75% of the total deals in the Asian region. The Asia pacific region raised almost $165 billion in 2018. It broke records by exceeding the all-time high of $159 billion of 2017. This was a 48% jump from the averages from 2013 to 2017.
China raised an astounding 94 billion USD through private equity investments in 2018. This was a 64% jump from the average of the last five years. There are two separate markets in China that deal in private equity and they both function quite differently. One of them operates solely in Chinese Renminbi and is almost completely exclusive to local funds and investments. The other one operates in foreign currencies.
The two countries have not looked back ever since the rise of the eastern economies and their increase in the share of the global economy. The 2008 financial crisis went on to further solidify their position compared to their western peers. The momentum hence created has helped to boost the Asia pacific equity market. They’ve gone on to break records in deal making riding on that momentum and increased confidence. The record high deal values and exit values achieved by the Asian equity markets have gone on to add to the global deal making and capital raising pool. The Asia pacific region has almost $883 billion worth of total assets under management. As a result, the Asia pacific region represents around 26% of the global private equity market.