Identifying good GPs is biggest LP challenge in SE Asia - AVCJ Singapore Forum

"There are a lot of suppliers of capital in Southeast Asia that might compete with private equity," said Yar-Ping Soo, partner at fund-of-funds Adam Street Partners, participating in a panel discussion on institutional investors' perspectives on PE in the region.

Anand Prasanna, a Hong Kong-based investment director at fund-of-funds Squadron Capital, said that the crucial thing is for GPs in the region to have the necessary networks. "It's the same thing in India. You're not dealing with first-generation people, but with very savvy people who have dealt with debt and equity providers for years," he explained. "Unless you're an insider, you won't be able see inside their companies for many years."

The LPs on the panel also spoke about the differences they have seen in fees and fund terms among different countries in the region, and Soo made reference to the "mind games" that ensue when heavy-weight LPs are offered better terms than the rest. A good tactic, she believes, is for GPs to offer LPs two or more options when it comes to fees - as Bain Capital did for the $2.3 billion Asia fund it closed earlier this month.

"When you give people two options, they spend all their time choosing which option to pick and don't really push back on terms," Soo said.

Hang Seng Low, who is responsible for United Overseas Bank's (UOB) fund-of-funds business, said that his firm prefers to back GPs who will contribute a sizable portion of their own capital to the fund. "We are a small investor and no-one is going to agree to our fee requests easily," he added. "That being the case, we have to focus on finding the best managers who can justify those fees."

The LP panel succeeded a discussion on the Indonesian investment landscape, in which Ancora Capital's Veronica Lukito, Saratoga Capital's Kay Mock and Quvat Management's Tom Lembong participated.

On Wednesday, the first day of the conference, the keynote speakers were Hartley Rogers, chairman of Hamilton Lane, and Donghyun Park, principal economist at the Asian Development Bank.

 

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• Topics
• Southeast Asia
• LPs
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• Southeast Asia
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• Squadron Capital Advisors
• Adams Street Partners
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