[19] Alta Views: your latest scoop of Private Capital Markets

Hi Alta-natives! In this edition, we will look at the private equity and venture capital trends in Asia Pacific, the increased attention in health tech companies and why hybrid foods are gaining investor attention.?

Private Equity Investment Fall is an Opportunity for Investors

• Private equity and venture capital investments in the Asia-Pacific region experienced a significant decline in the second quarter of 2023, dropping 34.5% to US$6B. The number of deals also slid 23.3% compared to the same period last year
• However, global private equity firms currently sit on a record US$2.49T in dry powder. Experts predict that deal activity will increase in 2024 and 2025 as pricing stabilizes and interest rates moderate. Mid-market deals have also started to pick up in recent months with the outlook of quantitative tightening and inflation growth looking more stable
• While the PE deal scene remains subdued, challenging conditions have created potential opportunities in the market, particularly in defensive sectors such as healthcare and consumer staples. The current environment can provide investors with significant opportunities to invest in good companies at discounted prices.

Private Credit’s dancing in the Streets

• The recent success of JLL in securing a $585 million loan for a property project highlights the thriving private credit market. This market has become attractive to long-term lenders looking for higher yields and borrowers facing challenges in public markets
• The private lending market in Asia is also gaining momentum, with Muzinich & Co. closing a $500 million Asia Pacific private debt strategy. UniSuper, an Australian fund, aims to expand its $15 billion private markets portfolio
• Investors can take advantage of the unique benefits offered by private credit as it becomes its own distinct asset class. Private lending typically offers higher yields than traditional high-yield indices, with returns ranging from 10% to 18%

Health Tech is a Blessing in Disguise

• Private equity firm TPG is making a significant move in the healthcare technology space by acquiring Nextech, a US-based health-tech platform, for US$1.4B. Nextech's medical software have proven valuable in streamlining administrative tasks
• In SEA, Indonesia-based health tech firm Halodoc has raised US$100M in series D funding, with Astra Digital International leading the round. Singapore-based respiratory monitoring firm Aevice Health has secured a new funding round from East Ventures. Aevice aims to assist the millions of Southeast Asians with chronic respiratory diseases
• This much traction suggests increased attention in health tech companies and a positive outlook for the industry. This could result in increased valuations and potential investment opportunities for private market investors in the sector

Top Private Markets Firms capture $510bn of Wealth Market

• Ten of the largest alternative asset managers pushing into private wealth run approximately $510bn in assets from this segment, with competition heating up to capture up to $12tn available from wealthy investors for private assets.
• Blackstone, which recently announced that it has reached $1tn in total assets, runs approximately $241bn for individual investors. It is followed by KKR, whose AUM from individuals is about $70bn, and Ares Management, which makes up about $65bn.
• There is between $8tn and $12tn in household funds available for private assets, according to Bain & Company. Individuals currently account for just 16% of private assets, even though they hold roughly half of global wealth.

Outlook for Deals and Financing in SEA still Optimistic

• The appetite for dealmaking and fund raising in Singapore and the larger South-east Asian region may improve later this year to next year as companies review their portfolios and pursue acquisitions to plug strategic gaps.
• PwC said in its mid-year review that merger and acquisition (M&A) activity ahead might not all be eye-catching mega deals, given recession fears and rising interest rates, but smaller deals that could also drive transformation and growth.
• According to Morgan Stanley, healthcare, technology and energy sectors will lead activities, adding that the record amount of uninvested capital in private equity funds could help drive more M&As later this year despite choppy debt-financing markets.

Hybrid Foods Trend Gains Traction

• The increasing popularity of the hybrid trend, which combines plant-based and animal proteins through microbial fermentation, as a sustainable and ethical alternative to traditional animal agriculture
• The agriculture industry is a major contributor to global warming, accounting for 80% of total deforestation and the use of 70% of the world's freshwater.
• Currently, the UK plays a leading role in hybrid food trends, accounting for 19.5% of all new meat hybrid launches worldwide in the last five years, with a staggering 54% annual growth rate.
• EVERY Co and Alpha Foods are teaming up to develop meat alternatives using animal-free egg whites, anticipating a high demand for these products.
• Private market investors can expect increasing investment opportunities in hybrid food companies as the trend continues to gain momentum, driven by shifting consumer preferences and the need for sustainable and nutritious options

Hybrid Food Market Size

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

?? Notable Fundraises

Farizon Auto | US$600M | Series A | CleanTech

Farizon Auto is a developer of an electric commercial van company that intends to reduce climate change. The company's long-range electric van which adopted battery swap technology can significantly reduce the emission of Greenhouse gases and provides its client with a more energy-efficient way to finish the task.

Halodoc | US$100M | Series D | HealthTech

Halodoc is a developer of a digital healthcare platform designed to simplify access to healthcare by connecting patients with doctors. The company's platform facilitates online consultation services between doctors and patients through video calls, web-based voice calls and chat.

MUSINSA | US$190M | Series C | E-Commerce

MUSINSA is an operator of an online e-commerce fashion outlet designed to maximize the value of each brand on its platform. The company platform offers personalized curation and storytelling for each brand which includes streets, global luxury goods, and designers along with a fashion web magazine.

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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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