[11] Alta Views: your fortnightly scoop of Private Capital Markets

Hi Alta-natives! In this edition, we will discuss private market firms accelerating on acquisitions, the outlook of private markets and how alternatives are performing in a challenging macro environment.

The Private Credit Bubble is brewing

• Asset owners are increasingly turning to private debt, which has become more attractive considering the turmoil in public markets, rising interest rates, and private equity valuations.
• Asia Pacific-focused private credit AUM (assets under management) are expected to reach an all-time high of $115.9 billion by the end of 2027 according to alternatives data provider Preqin .
• The outlook for private credit remains strong although the asset class will be tested by the higher interest rate environment and slowing economies.

Alternatives: Thriving Amidst a Challenging Macro Environment

• With interest rates at the highest level since 2007, many bankers continue to extol the merits of alternatives including private-market assets such as private debt.?
• But in certain segments, the strain of higher rates has begun to show.?
• The argument for an allocation in portfolios rests on the diversification benefits alternatives are expected to provide – lower correlations with traditional stocks and bonds, in addition to higher returns and lower volatility.

Private Capital Consolidation on the rise

• Private-markets firms increasingly see peers as potential acquisition targets in the race to expand assets under management and the fees they generate, according to consulting firm 贝恩公司
• Such transactions also establish new lines of business and provide opportunities to expand into new regions.
• The number of strategic acquisitions announced or made by the world’s 50 largest alternative-asset managers more than doubled from 2020 to a decade-high of 25 in 2021, Bain said; 2022 saw 18 such transactions, the second-highest total over the past decade.

How private markets can benefit the discretionary space

• The development of private markets fund structures suitable for discretionary mandates will be a “game changer” in the process of opening up the space to retail investors, experts told delegates at Investment Week's debut Alternatives Summit.
• Individual investors hold roughly 50% of the estimated $275trn to $295trn of global assets under management. Yet those same investors represent just 16% of AUM held by alternative investment funds, according to 贝恩公司

Fidelity International expands to Asia

• A growing appetite for private-market investments in Asia has persuaded Fidelity International to expand its efforts to grow its private-asset capability in the region – first, in terms of distribution, and later, potentially in asset management.
• Fidelity manages a total of US$728.6 billion in client assets, comprising US$524.9 billion in asset management and another US$203.7 billion in assets under administration. Asia accounts for a third of the asset management, which is invested mostly in public markets.

Riding the crest of the tokenization wave

• Blockchain enthusiasts have been touting tokenization’s benefits for as long as cryptocurrencies have been used to digitally represent value. But one thing that was lacking until now, at least for those in the traditional finance space, was regulatory clarity.
• Blockchain adoption continues to grow; today with an increase trading volumes in tokenized assets, strengthening stakeholder sentiment across many countries, recognition among monetary authorities and regulators, more asset classes being tokenized, as well as a growing pool of active developer talent in the blockchain, tokenization is set to revolutionize the traditional finance.

SEA asset owners chasing more private assets

• A new report suggests that Southeast Asian asset owners are in particular keen to increase their private markets exposure.
• According to the report, Asset Management in Southeast Asia 2023: Seeking New Growth Opportunities asset owners either have already increased or are looking into increasing allocations into private market investments with the conviction that these assets offer better risk-adjusted returns.

BlackRock Betting on Private Markets

• BlackRock is shaking up its alternatives business with roughly $300 billion of assets, as the firm seeks to build more focused teams for private credit and direct equity strategies.
• Global credit chief Keenan to focus solely on private credit and seeks to capitalize on growth of private markets

Investing in Luxury Watches

• According to a Knight Frank report, Asia Pacific-based UHNWIs are more interested in purchasing watches, wine and jewelry when compared to global counterparts.
• Rolex watches have outperformed gold, real estate, and stocks over the past 10 years
• Tune in to the recent CNA podcast "Money Talks -Alternative investments: Can luxury watches make you wealthy?" to know more about the pros and cons of investing in luxury watches

?? Exclusively on Alta

Canva , SwipeRx , Bibit , Konvy , Revoult discover who’s trending with our investor network! Researched by experts, voted by insiders. View our Top Picks here !

?? Notable Fundraises

Ace Turtle | US$34M | Series B | E-Commerce

Ace Turtle is a developer of a technology-driven order management platform designed to channel web-influenced commerce.

Advanced Intelligence Group | US$80M | Series E | Artificial Intelligence

Advance Intelligence Group consists of an ecosystem of AI-powered, credit-enabled products and services that includes consumer financing, enterprise KYC, fraud and risk management solutions and merchant services SaaS platform.

Flash Coffee | US$50M | Series B | Food & Beverage

Flash Coffee is an operator of a tech-enabled coffee chain intended to make coffee accessible to Asia’s rising middle class.

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About Alta Views

A fortnightly collection of the latest news from Private Capital Markets. Put together by Alta’s team of analysts, we bring you the most critical and timely pieces from private markets, to help you navigate the broad horizon. Stay tuned as we bring you the most notable fundraises, analysis on industries and companies trending within investor networks, the latest headlines, and more!

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About Alta

Alta is Southeast Asia’s largest digital marketplace for alternative investments. Alta gives investors direct access to invest and trade in a wide range of curated alternative assets, from direct investment into early to late-stage private companies, PE/VC funds, asset-backed securities of luxury assets, real estate, and more.

As a licensed integrated marketplace, Alta brings the trading and distribution of securities, fund management, and payment solutions under one roof. Through its blockchain-powered exchange, Alta is also able to support tokenization, digital custody, and trading of alternative assets.

Alta is headquartered in Singapore with global offices in Malaysia, Indonesia and India.

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