Private Equity in Southeast Asia

Running Head: PRIVATE EQUITY IN SOUTHEAST ASIA

Private Equity in South East Asia:

Challenges and Opportunities

Syahril Malik

Daniels College of Business – University of Denver

PRIVATE EQUITY IN SOUTHEAST ASIA: CHALLENGES AND OPPORTUNITIES

Abstract

Private Equity (“PE”) has played a big role in the investment world, not only because it generates relatively more return for the investors compared to other forms of investments, but also it has a huge market capitalization in terms of invested funds. As many investors and finance people know, the United States has been the biggest playing field for PE firms since 1980 as it is a developed market with mature structure and clear regulations. However, due to competition and limited resources in the United States, investors and PE firms have a growing need for a new market to grow and expand their business. One of these new, emerging markets for PE is the Southeast Asia region. This Southeast Asia region is characteristic of developing countries that are rich with natural resources. Most of the countries in this region of Southeast Asia have a lot in common including; they are developing countries, they are rich with natural resources and they all have a big market in terms of population. One of the exceptions in this region is Singapore as it is considered a developed country, especially in the finance sector. Southeast Asia is very lucrative in the sense that it offers a lot of opportunities for investors, including PE investors and firms, however, in order to realize the revenues and returns of these opportunities these firms would need more knowledge on how to deal with the challenges in this new emerging market.

I. Private Equity in Southeast Asia

The emergence of Private Equity (“PE”) markets outside the United States and Europe has significantly broadened the scope of portfolio diversification. Also, due to the growing importance of PE in nontraditional markets, the need for investors to broaden...