Nick Wee, Author at SeaTown

Private equity is set for a more positive 2025, with institutional investors focusing on managers who invest in businesses that generate cash flows.

At a Seviora Group media roundtable, SeaTown’s Managing Director for Private Equity, Dickson Loo, shared his views on private markets in Asia Pacific alongside Seviora Group and Azalea Asset Management. They discussed how capital markets are opening up, and with inflation moderating and supportive interest rates, IPO opportunities are on the horizon.

“Obviously the capital markets are opening up a little bit, and I’m optimistic that with inflation moderating and interest rates (being supportive of) the stock market, this will provide IPO (opportunities),” said Dickson.

“In Southeast Asia, there are about 70 million SMEs that contribute about 45% of the region’s GDP. Having spoken to business owners in this segment for over a decade, we do see that there is a great acceptance in terms of using private equity as a source of funding,” he said.

“Therefore, I (would) say that business owners, who have been traditionally a bit more hesitant, are a lot more sophisticated, not just on the private equity side, but also on the private credit side. And this is really driving growth in this segment,” he added. “We are also quite excited about this segment. We see a lot more interest moving into the segment because there is quite a lot of dry powder looking to deploy in Southeast Asia.”

At Preqin’s Private Equity, Venture Capital & Private Debt in 2025 webinar in January 2025, our Deputy CIO and Managing Director for Private Investments, Eddie Ong, shared his insights on key trends and opportunities in Asia Pacific Private Markets.

Eddie highlighted that as developed private credit markets undergo significant shifts—marked by declining risk-free rates and narrowing credit spreads—investors are increasingly turning to Asia. Speaking to some of the unique benefits available to allocators, he explained, “In Asia, credit structures are typically more diversified, with strong credit governance and protection through hard collateral. This creates significant value for investors looking at Asia private credit from a risk-adjusted perspective.”

“As base yields decrease, the difference between the targeted returns of private credit funds and private equity funds will widen, and institutional investors might increase allocations to private equity as returns look relatively more interesting.”

In a recent interview with Nishtha Asthana of AsianInvestor, Eddie Ong, Deputy CIO and Managing Director of Private Investments at SeaTown, shared valuable insights on the evolving landscape of private equity in the face of potentially lower rates.

One highlight from the article is the growing appeal of hybrid strategies in the current environment. Such strategies, combining both credit and equity features, are gaining traction among larger asset managers.

At SeaTown, the private equity investment strategy is developed with a long-term, through-cycle focus on value and platform building that is not predicated upon interest rates.

Both income and growth are key requirements of institutional investors’ mandates. As a firm, SeaTown has both private credit and private equity solutions for investors, as both asset classes are instrumental in helping LPs achieve a balanced portfolio construction in their asset allocation to alternatives.

Chi Kit Chai, Chief Investment Officer at SeaTown, recently shared his insights with Giovanni Amodeo of ION Analytics / Mergermarket.

With a shifting macro environment and the tailwinds from ultra-low interest rates behind us, improving the operations of our portfolio companies to drive successful investment outcomes becomes more important than ever before.

Chi Kit shared how SeaTown’s private equity team adds value to its portfolio companies by helping them access our broader ecosystem in Asia – facilitating relationships and driving opportunities for resilient growth and operational efficiency.

He also believes that a buy-and-build strategy is particularly effective in ASEAN. The region’s 70 million small and medium-sized businesses and fragmented industries present a compelling opportunity to build larger platform companies by integrating complementary businesses, generating cost efficiencies and benefitting from improved economics.

Other topics included SeaTown’s approach to sustainability and ESG, what effective investor engagement looks like, the growing investor demand for private credit in Asia Pacific, and the path forward for SeaTown.

Skyform, a company established in 2024, offering a broad suite of cutting-edge enterprise technology services, was officially launched today by SeaTown Holdings International (“SeaTown”), in partnership with seasoned technology investor and entrepreneur Yuan En Lim (“Yuan En”).

Headquartered in Singapore, Skyform focuses on enterprise technology consulting, implementation, and development services. Backed by a capital commitment of up to SGD100 million from SeaTown Private Capital Master Fund (“PCap”) and Yuan En, Skyform will target key Asia-Pacific (“APAC”) markets, offering strategic services across third-party application software, custom software and data solutions. Skyform will continue to pursue inorganic growth, acquiring and scaling enterprise technology services companies in the region.

SeaTown’s private equity strategy centres on buy-and-build companies, delivering scalable growth and value creation. SeaTown’s private equity experience in APAC spans over a decade, with PCap having committed and deployed over USD300 million into six APAC-based companies including Foundation Healthcare Holdings, a Singapore-based private specialist healthcare group; YYC Holdings, a Malaysian professional services firm; and Linnovate Partners, a leader in asset servicing and fintech for the alternative investment industry. The establishment of Skyform aligns with SeaTown’s strategy of targeting industries with attractive financial profiles and resilient growth.

Founder and CEO of Skyform, Yuan En brings 16 years of regional experience investing in and growing platforms such as Straive, Everise and Everlife. He most recently co-led Southeast Asia direct buyouts at private markets investor, Partners Group. Under his leadership, Skyform aims to create a best-in-class digital transformation partner for large and medium enterprises in APAC.

Dickson Loo, Managing Director of SeaTown, said, “Skyform’s vision to build a scalable, multi-market company across key Asia-Pacific markets aligns closely with SeaTown’s strategy and approach to value creation. We are excited to partner with Yuan En to realise our shared vision and work collaboratively to capitalise on the secular trend of digital transformation across the region. Leveraging our deep market access and extensive talent network, we are confident that we can play a big part in supporting Skyform’s growth.”

Yuan En said, “Skyform addresses a market gap in the region for a trusted top-tier technology partner to emerging large and medium enterprises. While there are today several high-quality boutique providers, we aim to build a scaled, multi-market platform with deep domain expertise. Our focus will be on bringing to market a differentiated customer proposition and sustained delivery excellence. I’m thrilled to have the SeaTown team’s support and value creation DNA as indispensable pillars for this partnership.”

A unit of Singapore’s state-owned investor Temasek Holdings Pte. has raised $1.3 billion for its second private credit fund, in a sign that Asia’s fledgling direct lending industry remains attractive to investors hungry for yield and asset diversification.

SeaTown Holdings International completed the fundraising for its SeaTown Private Credit Fund II, backed by a group of limited partners including insurers, endowments, and family offices, the alternative investment firm said in a statement. The new fund also received support from an unspecified Middle Eastern institutional investor.

With the $1.2 billion secured for SeaTown Private Credit Fund I, the firm’s private credit strategy now oversees more than $2.5 billion in assets under management, the statement said.

The Singaporean firm’s funding success offers hope that the world’s $1.7 trillion private credit industry is slowly getting back on its feet after a slump earlier this year when the Federal Reserve maintained its tight policy stance amid sticky inflation. Now with the US central bank widely expected to reduce interest rates next month, direct lenders’ prospects have turned brighter, especially for those in Asia where growth has been faster given a low base.

Private debt fundraising in Asia Pacific reached $1 billion in the second quarter, up from $600 million between January and March, according to data provider Preqin Ltd. The improvement came after direct lending globally scraped the lowest level in any quarter since 2020 in the first three months of this year.

Read the full article here (subscription may be required): https://www.bloomberg.com/news/articles/2024-08-27/temasek-s-private-credit-arm-raises-1-3-billion-for-new-fund

SeaTown Holdings International (“SeaTown”), a leading Asia-focused alternative investment firm and wholly-owned subsidiary of Temasek’s asset management group Seviora Holdings, is pleased to announce the final close of the SeaTown Private Credit Fund II (“PCF II”) with over US$1.3 billion in capital commitments. The total commitment size of the second fund surpasses the US$1.2 billion secured for SeaTown Private Credit Fund I (“PCF I”), further adding to the firm’s growth momentum for its private credit strategy.

“We are immensely thankful for the support we have witnessed following the launch of PCF II,” said Patrick Pang, CEO, SeaTown. “This milestone highlights not only the growing appetite for Asian private credit in institutional portfolios around the world but also reflects the confidence and trust in SeaTown’s approach. Our private credit team has demonstrated a clear ability to repeatedly source, structure, and execute complex and bespoke deals across industries. We are excited to continue executing on our proven investment strategy to deliver attractive risk-adjusted returns to our investors.”

Increased activity in Asia-Pacific’s private markets is creating an attractive career pathway for investment bankers, public equity managers and other finance professionals.

This trend is also generating demand for training, and pushing managers to adopt proactive talent management policies.

Our Managing Director for Private Capital, Dickson Loo, told The Business Times’ Joan Ng that the attraction of capital to the Asia-Pacific region is a major talent draw. “We have seen many overseas graduates and professionals returning to their home markets in Southeast Asia due to the potential of the different markets and investors’ interest in this region,” Dickson said.

SeaTown is dedicated to in-house training to ensure our team has the right foundation, approach, philosophy, and culture. Our commitment to fostering the next generation of leaders is exemplified by the SeaTown Sustainability Scholarship with Singapore Management University, offering a grant and an internship to sustainability majors.

Private credit continues to be in favor as central banks go slow on rate cuts, while rising risks and evolving strategies come into focus.

“In the Asia-Pacific market, we see private credit delivering steady mid-teens returns to investors over the longer term. This is considerably higher vis-à-vis the long term returns of public equities or bonds.”, says Eddie Ong, our Deputy CIO and Managing Director for Private Investments.

Eddie recently discussed the rising appeal of Asia’s private credit market with Nishtha Asthana at AsianInvestor.

SeaTown is seeing an increasing interest in a performing Asian private credit strategy from global investors who have traditionally deployed in developed market credit strategies.

“Given that Asia private credit AUM (assets under management) is less than $100 billion, we believe there is significant growth potential,” noted Eddie. On risks surrounding the asset class, he shared that “with its customised deal structures, assessment must look beyond simple leverage or debt service coverage ratios” and that “downside protection mechanisms and third-party guarantees are crucial in determining creditworthiness”.

SeaTown believes that successful management of sustainability issues is essential to durable long-term returns. As a supporter of TCFD, a signatory of UN PRI and a member of the IFRS Sustainability Alliance, SeaTown is committed to transparency and has launched its first full-fledged Sustainability Report.

Our inaugural report sets out SeaTown’s approach to responsible investing and our uncompromising stance on robust governance and business ethics. We believe that it is our responsibility to exercise thoughtful stewardship to safeguard the long-term value of our investments.

This report is a culmination of our firmwide, multi-year effort to integrate sustainability across our business.

For our efforts, we have achieved Principles of Responsible Investment (PRI) scores of 4-5 stars across our funds and firm processes. We have also been one of the few Asian organizations to be invited on the PRI in Person Signatory Advisory Committee for the past two years.

Along with our peers and stakeholders, we will work together towards a more sustainable future. SeaTown is also a member of the Asia Investor Group on Climate Change (AIGCC).

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