HSG’s multi-billion-dollar continuation vehicle (CV) for a portfolio that included ByteDance, which closed earlier this year, has spawned a wave of prospective copycat deals.

Sponsors across the size spectrum – from Hillhouse Investments to Primavera Capital Group to M31 Capital – are exploring ways to monetise portions of their stakes in Chinese technology groups, according to multiple industry sources. Interest is concentrated on ByteDance and Xiaohongshu, where there is a reasonably liquid market for direct stakes via share buybacks or ad hoc trades.

These transactions won’t necessarily match the reported USD 3bn raised by HSG, but they represent a segment of Asia’s CV universe that is increasingly significant yet still discrete: at odds with buyout-centric global norms for such deals and off-limits to many traditional secondary investors.

Based on recent history, Abu Dhabi Investment Authority (ADIA) should be the first call for any manager contemplating a China-heavy CV. The sovereign wealth fund has led at least three GP-led transactions in the past 24 months, and three sources familiar with the situation claim it will be one of the lead investors in Primavera’s CV, which comprises positions in ByteDance and Ant Group.

More broadly, ADIA is described as the sophisticated tip of robust Middle East appetite for attractive Chinese companies of scale. Mubadala Investment, for example, recently announced a significant minority investment in Luckin Coffee. The USD 1bn deal is structured as a CV, with Centurium Capital, which owns the coffee chop chain, compensated for managing the entity Mubadala is backing.

Middle East money is the most visible form of non-traditional capital being channelled into GP-led secondaries in the region. Lloyd Bradbury, head of Asia Pacific private capital advisory at Greenhill, observed that it often feels like participation by these investors is important to getting a large CV done.

“If you look at some of the large fund-to-fund transfers that have co-investment around the edges and could be seen as secondary in nature, they require similar participation from those investors,” he said.

“While we are seeing several secondary situations where non-traditional buyers are playing a role, for a multi-hundred-million-dollar or multi-billion-dollar transaction, it’s left to a select group of sovereigns and maybe some pensions.”

Perhaps equally striking is how these investors do not feature among the leads for CVs lacking exposure to certain Chinese assets. Across the wider region, a consistent collection of traditional players – defined as those with specific secondaries mandates – hold sway.

Asked to name likely leads for a mid to large-cap CV, industry participants give roughly the same names they gave five years ago. They offer a familiar response when asked why little has changed: Asia has yet to deliver enough deals of sufficient size and quality that global investors will pursue opportunities beyond tried and tested markets in the US and Europe.

“It’s been reasonably stable over the years, which is largely a function of firms not having a critical number of people on the ground in Asia to do the work, understand the assets, and convince an IC [investment committee] that’s far away to deploy what is potentially a sizeable cheque to lead a deal,” said Dominic Goh, a managing director at HarbourVest Partners.

Anatomy of a buyer

Unicorn CVs sit uncomfortably with many traditional secondary investors for several reasons. For some, they can’t be contemplated for regulatory reasons, notably restrictions on US investment in Chinese companies with exposure to certain technologies. “I just can’t take that to my IC,” one secondaries investor with a US-based firm said of ByteDance.

Others regard them as contrary to what secondary investors normally do, citing limited visibility on financials and access to management that come with being a relatively insignificant presence on cap tables. Martin Yung, a managing director and head of PE secondaries at Aquilius Investment Partners, likens unicorn CVs to private stock-picking.

Moreover, Brooke Zhou, a partner at LGT Capital Partners, questions the commercial rationale of piling into companies that are actively pursued by the likes of Middle East sovereign wealth funds.

“It’s debatable whether you can still get great deals in those situations. If you go one layer deeper, targeting slightly smaller and less well-known companies, there are many attractive opportunities. Most investors don’t know them or aren’t confident enough backing them,” she said, noting that LGT has done this with more diversified China portfolios.

Exclude the idiosyncratic investor line-ups found in those transactions and most advisors point to a handful of groups willing and able to put USD 200m into a CV. They include AlpInvest Partners, Coller Capital, Goldman Sachs Asset Management, Hamilton Lane, HarbourVest, LGT, Pantheon and StepStone.

For a hypothetical USD 800m deal, two leads would typically be required to cover roughly half the equity. The GP commit might amount to a further USD 40m, with the rest coming through rollovers from existing LPs and post-agreement syndication to other investors.

Some secondary specialists have seen Asia bite sizes rise in tandem with growing global programmes. HarbourVest, for example, can seldom consider opportunities in Asia that require less than USD 200m, and co-investment takes it into the USD 300m-USD 600m range, industry sources claim. Co-investment also pushes Asia-only players like TPG NewQuest into the circa USD 200m echelon.

In mid-size transactions that account for the bulk of Asia’s opportunity set, these larger lead investors often eat into equity that might otherwise go into syndication. When Multiples Alternate Asset Management raised USD 430m for an India multi-asset CV last year, Hamilton Lane, HarbourVest, LGT, and TPG NewQuest covered the entire deal.

Frewen Lam, a managing partner at Roc Partners, observed that deals in popular markets such as Australia and New Zealand tend to cap out at USD 300m-USD 400m. “Not many funds are above USD 1bn and they’re buying 50% or more of companies with USD 100m equity cheques. Even if those assets double in size, they aren’t large in terms of enterprise value,” he said.

The buyer universe inevitably widens for mid-size deals, although interest varies by target geography and the extent to which local bandwidth is distracted by other situations. One advisor suggested there are 15-20 potential leads for Australian CVs but fewer than 10 for China. As for Korea, “You go through the staff lists and see who has a Korean at vice president or above,” the advisor added.

For equity cheques below USD 100m, it fragments. Paul Robine, CEO of TR Capital, estimates only a handful of groups can make lead commitments of this size in Asia – most global secondaries players aren’t interested while others lack the necessary capabilities.

“There’s such a gap between the money available and the opportunity,” he said. “The bar to entry is higher as a lead investor. It’s not just about negotiating terms, it’s about corporate governance, protecting your rights and creating intention to generate exits.”

Asian evolution story

There is a developmental narrative in Asia GP-led secondaries, albeit nascent and from a relatively low base. Brian Lim, a partner at Pantheon, noted that marquee assets are now coming through in place of “mainly multi-asset deals comprising zombie assets or growth-stage assets that had overstayed their welcome in VC portfolios.” This has happened in the last few years.

Campbell Lutyens suggested in a recent report that 2026 is a watershed, flagging closed GP-led deals involving Asia PE assets of USD 4.9bn in 1H26 – surpassing the CY25 total of USD 3.9bn – and another USD 7.1bn currently in market. Could this be the year when Asia’s significance in primaries is felt in secondaries and the region accounts for more than just a low single-digit share of global GP-led volume?

Echoing Lim, Campbell Lutyens claimed that “secondaries have evolved beyond just a liquidity solution, enabling GPs to achieve a range of strategic franchise objectives.”

Navis Capital Partners positions its first two CVs at either end of this evolutionary spectrum. The Southeast Asia-based manager entered the GP-led space in 2021 with a USD 450m transaction intended to generate liquidity from a fund nearing end of life. It returned last year, raising a USD 230m CV that provided additional time and runway to develop a portfolio of school assets.

Nevertheless, Rodney Muse, a managing partner at Navis, still divides the lead investor universe into two distinct groups: those with an appetite for thematic, high conviction plays, that are less price sensitive, and emphasize growth in their underwriting; and those that prioritise the size of the discount to net asset value (NAV) and near-term liquidity from relatively diversified portfolios.

An Australia-based manager had a similar experience on launching a CV that, for various reasons, needed to price at or close to par. Half of 30 interested parties dropped out because they couldn’t accommodate anything less than a 10% discount, a partner at the firm noted.

Muse recalls reaching out to 30 potential lead investors for the first Navis CV. They ended up with five serious prospects, all from firms with local teams empowered to do deals in Asia. While accepting the market has since deepened, he is dubious as to how many investors are willing to lead mid-cap deals.

“The number of investors who participated in our CVs in some way and want to get to the point where they can lead is increasing – which is good – but it’s not a long list,” Muse said.

This is consistent with observations from other industry participants. According to the first advisor, it has become standard practice for many of the secondary specialists approached about a sub-USD 500m CV in Asia to pass on leading and later ask for a piece of the post-deal syndication. “Not so many will go to their IC, stick their neck out, and vouch for something,” the advisor said.

Yung of Aquilius added that most global groups see Asia as a “nice to have” and are focused on the US and Europe, which offer economies of scale. It is difficult for those that lack bandwidth and experience in the region to move forward on deals where GPs require a lot of handholding.

“Asia has always been a market where you need to burn a lot of calories to successfully source, execute and close a transaction, and sometimes there are very long lead times. There’s a lot of pre-marketing, pre-price discovery, real price discovery, conversations with LPACs [LP advisory committees], and if the deal doesn’t get to where it needs to be then it gets put on hold,” he said.

Navigating complexity

Some obstacles are structural. TR Capital presents the Asia secondaries opportunity in stark terms: USD 800bn of NAV held outside of renminbi-denominated funds that is more than five years old and seeking liquidity in the next 1-3 years. But most of it comprises minority equity positions. In this sense, confidence in secondaries correlates to being able to navigate uncertain exit timelines.

Transactions can be protracted because they are essentially compromises that pull on asset selection and financing structuring levers to find solutions that work for all stakeholders. Recent multi-asset CVs in China and India, for example, have blended near-term IPO candidates with longer holds. But every position in a portfolio must be stress-tested across different scenarios.

“If the GP expects an exit in three years, we look at different routes, ask what a financial sponsor or strategic would pay and whether the promoter would allow that to happen,” said Pantheon’s Lim. “We can’t underwrite based on a GP saying there will be an IPO next year. Given the volatility of markets – India being a case in point – you can’t rely on a single exit avenue.”

One investor observed there’s “never a dull moment” when presenting Asia deals to global ICs and trying to apply risk-reward metrics to situations that can vary markedly in terms of size, structure, underlying investment type and quality of manager.

Beyond comfort with local nuance, three factors are seen as integral to deepening the pool of lead investors for Asia-based CVs: more global sponsors launching such transactions; more strong performance from past investments; and more local pools of capital serving as industry torchbearers.

Last year, CVC and KKR became the first international names to close single-asset CVs in Asia, although neither surpassed USD 600m in size. Advisors note that more USD 1bn-plus deals from brand-name sponsors would make it easier for new investors to enter Asia. South Korea’s Hahn & Company has raised the largest CV to date for a buyout investment, securing USD 1.5bn in 2022.

That is one of approximately 20 single-asset CVs in Asia tracked by AVCJ Research. Two have been exited via trade or sponsor-to-sponsor sales and a third is pending completion. A fourth, National Stock Exchange of India (NSE), went public in September at valuation 3x where it was marked when ChrysCapital Partners moved its stake into a CV in April 2024.

These are encouraging outcomes – and there have been exits from multi-asset CVs as well – but 15 of Asia’s single-asset cohort closed within the past four years. The region’s track record has yet to replicate that of the US and Europe, where HEC Paris business school and Evercore claim distributions from CVs in the 2018-2020 vintages compare favourably to those from buyout funds.

“We saw CVs take off in Europe, then in the US, and this was helped in part by some early success stories that gave GPs confidence they could generate returns,” said HarbourVest’s Goh. “Asia was later coming to the game and holding periods tend to be longer here anyway. We are starting to see some success stories, but we need to see more.”

Local torchbearers

The local capital issue, meanwhile, is challenging to address at scale. Roy Kim, a partner at TPG NewQuest, observed that approaching the region through an opportunistic allocation rather than a dedicated pool of capital means GPs worry about transactions being fully underwritten. This is especially true of USD 1bn-plus deals for single-asset CVs.

“At the same time, GPs often perceive a failed CV process as carrying greater execution and reputational risk than a conventional M&A process, as a CV process will generally involve its LPs more,” Kim said. “The market would greatly benefit from an increase in large-scale secondary capital with the ability to underwrite these transactions and provide higher certainty of execution.”

TPG NewQuest is the only manager to raise USD 1bn for an Asia private equity secondaries fund. No other GP native to the region has surpassed USD 500m. Indeed, new entrants or new strategies are staying deliberately small, targeting middle-market niches seen as deeply undercapitalised.

“There’s a sell-side demand in that space in this region. And that’s being met by more fundraising focused on direct transactions in the middle market,” said James Ford, a funds partner at Ashurst.

Axiom Asia, currently in the market raising its second direct secondaries fund, fits this profile. So do Kenro Capital, Neo Asset Management, and 360 One Asset, which have launched India funds largely concentrated on buying partial stakes in growth-stage assets directly from VC investors.

These GPs are unlikely to fill out the list of potential CV leads, but others might. LGT is raising a dedicated Asia secondaries fund that will sit alongside its existing fund-of-funds products. Coller is said to be planning something similar, having to date mainly deployed in the region from global secondaries funds. Aquilius already has Asia real estate secondaries funds and is expected to add private equity.

Targeting LP-led as well as GP-led transactions – LGT’s Zhou and Aquilius’s Yung both declined to comment on fundraising – these vehicles will not transform the regional CV ecosystem. As a second advisor put it, if 50% of a USD 1bn fund is earmarked for GP-led deals, that’s USD 100m in additional capital per annum over a five-year period. Co-investment could push it to USD 150m.

Greenhill’s Bradbury, however, takes a different view. These funds are significant not only in driving the market flywheel, but also in drawing more attention to what can be achieved in Asia secondaries.

“Having LPs who commit to these Asia-focused secondary vehicles engaging in robust discussions around what the opportunity is and what an Asia secondaries strategy looks like is helpful for everyone in the market, from on-the-ground dealmakers to global IC members,” he said. “It elevates the level of focus on APAC in a way that has more impact than the specific dollars going into those vehicles.”