In a recent ION Influencers fireside chat, James Ford, Partner at Ashurst and a 20+ year veteran of the private capital secondaries market, dissected the current state and future trajectory of liquidity solutions in Asia Pacific. The discussion revealed a market on the brink of a major resurgence, driven by evolving investor needs and creative financial engineering.

Key Topics Discussed & Market Insights

1. The Current Cycle: A Resurgence is Here

James Ford identified that the Asian secondaries market is on the “cusp of a resurgence” after a brief hiatus (2021-2023). This new growth phase spans all segments of liquidity solutions, fueled by a “wall of unrealized investments” nearing the end of their fund life and a surge of capital from dedicated secondary funds and evergreen vehicles targeting high-net-worth investors.

2. Primary Drivers of the Secondaries Boom

• Demand for Liquidity: Sponsors and LPs are seeking alternatives to traditional M&A and IPOs.

• Capital Influx: Massive funds raised by secondary specialists and the rise of semi-liquid/evergreen funds have created a large pool of capital hunting for deals.

• Investor Appeal: Secondaries offer J-curve mitigation, earlier cash flows, and instant diversification—especially attractive for newer semi-liquid fund structures.

3. Investor Motivations: Why Secondaries?

• For Buyers (LP Portfolios): Access to diversified, mature portfolios that provide earlier distributions.

• For Sponsors (Continuation Funds): A strategic tool to retain top assets longer, realizing further upside and providing liquidity to existing LPs. Modern continuation funds are now highly selective and strategic, not just end-of-life solutions.

4. Geographic Hotspots & Evolution in Asia

• Advanced Markets: Australia and India are leading in sophistication and large-scale transaction volume. India has seen dedicated secondary vehicles launched.

• Emerging Opportunity: China is poised for a comeback. Ford predicts increased activity as quality assets seek liquidity outside constrained traditional exits.

• Catching Up: Southeast Asia is active with a mix of deals. While Asia still lags the US/Europe, the gap is closing rapidly. The main historical gap has been the prevalence of minority growth equity positions in Asia, which are harder to underwrite for concentrated secondaries. This is changing as more control positions enter the market.

5. The Evolving Deal Landscape

• Increase in Off-Market Deals: There’s a notable rise in smaller, off-market, and “ad hoc” transactions, demonstrating widespread adoption beyond headline deals.

• Due Diligence Deepens: As deals become more concentrated (e.g., single-asset continuation funds), due diligence now intensely focuses on underlying asset operations, financing structures, and management incentives—mirroring direct investing.

• Early Advisor Engagement: Top firms like Ashurst are now involved at the very inception of deals, especially on sell-side and GP-led transactions, to help shape structure and investor communication.

6. Quick-Fire Predictions & Final Takeaways

• Financing Solution to Watch: NAV Financing and Preferred Equity are poised for growth in Asia as tools to bridge valuation gaps.

• Market Dynamics: Currently a “buyer’s market,” but sellers with high-quality assets hold strong leverage.

• Biggest Regional Opportunity: The Asian mid-market and lower mid-market, where regionally-focused, right-sized funds can capitalize on a significant transaction pipeline.

• Future of Firms: While global giants will chase large deals, significant opportunity exists for specialized, regional secondary players.

Key timestamps:

00:07 Introduction to the Fireside Chat
00:37 Guest Background and Experience
01:14 Current Market Cycle in Secondaries
02:05 Drivers of Market Resurgence
03:33 Investor Interest in Secondaries
05:57 Client Needs in Secondary Transactions
07:14 Geographical Variations in Market Education
10:13 Market Gaps and Challenges in Asia
11:49 Transparency in Secondary Transactions
14:48 Evolution of Due Diligence Practices
17:54 Recruitment and Talent Development
19:44 Future Trends in Financing Solutions
21:00 Market Dynamics: Buyers vs Sellers
21:36 Opportunities in Mid-Market Transactions