Prashant Kumar is a partner and head of the Southeast Asia private equity team at KKR. He joined the firm in 2018, initially covering India, and has led investments in Ascend Asia, Medical Saigon Group, Max Healthcare, JB Chemicals & Pharmaceuticals, and Vini Cosmetics. Prior to KKR, Kumar worked for ChrysCapital Partners and Warburg Pincus.

Q: Large-scale buyout opportunities tend to be in short supply in Southeast Asia. What’s your take on the market?  

A: People have overlooked Southeast Asia historically, but we are seeing significant control and co-control deals – significant in terms of the number of opportunities and the scale of those opportunities. Banker-related deals will always be few, which means you must work harder to get the top of the funnel built out. But once you do that, the deal flow can be interesting, with large transactions available at attractive multiples. Southeast Asia is one of the top private equity markets in the region for us, alongside Japan and India.

Q: How has the opportunity set evolved?

A: We arrived early. We were among the first global investors to enter Vietnam in 2011 with Masan Group, and then we went into Malaysia in 2013 and the Philippines in 2018. Like all emerging markets, there was a skew towards partnership deals or minority deals. The role played by private equity was more like that of a thought partner, helping large business groups with their growth capital requirements. There was no opportunity for transformation, value creation, operational excellence, and utilising global connectivity.

And then the quantum of investment wasn’t that large. Malaysia, Vietnam, Singapore, Indonesia and the Philippines are of significant size today, but it’s taken them a while to get there. Back then, family groups could rely on their own reserves; they didn’t necessarily need to bring in much foreign capital. Now, I see trends in Southeast Asia that are along the lines of what I saw in India 10 years ago – the progression from partnership and minority deals to control. We have built up our India presence to become the leading control investor in that country. We are bringing that thinking to Southeast Asia.

Q: What are the reasons behind this shift in Southeast Asia?

A: First, over the last three to five years, the dynamics around succession have started playing out. A lot of the patriarchs and matriarchs of these family groups are planning for the next generation, so we see more succession-related deal flow. Second, when we started out, global multinationals were doing well; there was no pressure to divest. Today, they are looking to shed assets in markets that are attractive but maybe not top priorities for them. Southeast Asia is small compared to India and some other emerging markets. Third, founder-owned companies have scaled to the point where we can make significant investments in them. It might be that an entrepreneur wants to partner with us and have us clean up their cap table or they have acquired a bunch of smaller competitors and need help managing the larger business. Our pipeline is mostly control. Our last three deals – Medical Saigon Group, Ascend Asia, and XCL Education – were 100% buyouts with management teams.

Q: Minority investments must be co-control?

A: Yes, and we are very selective. We want to be an active partner – helping recruit high-quality talent, leveraging our global networks and sector expertise to develop best practices – not a passive investor. We also need significant rights around exits.

Q: What are those rights? More than put options?

A: Typically, a put option would not be very attractive because you get it at a basic return. Ideally, you want to have full freedom, at different waterfall stages, to pursue a listing or run a process to sell control. Minority sales typically don’t fetch great value these days because buyer interest is limited.

Q: Last year, KKR provided USD 750m in financing to Singapore-based energy, chemicals and infrastructure conglomerate Chandra Asri Group. What does this say about how you look to work with family groups in Southeast Asia?

A: Our senior leaders in different countries are responsible for building those relationships. And it starts with the relationship first; then you think about what solution best meets their needs. We have conversations with these groups that are wide-ranging and may touch on any of our strategies – private equity, infrastructure, credit, real estate, impact, growth-stage technology. As these relationships develop, different opportunities emerge. The most attractive succession deals will go to those who have spent time building that trust.

We built a relationship with Chandra Asri through our credit and private equity teams, and it was followed by regular dialogue with our family capital team. We discussed their infrastructure ambitions and credit needs as they were looking to buy the Esso fuel station network in Singapore, and this led to us bringing in unique pools of capital from KKR at scale. It’s an important transaction for us in terms of our relationships with families in the region because what you do with one group resonates with others.

Q: There were also several private equity investments in Masan Group entities between 2011 and 2017…  

A: Many groups have the DNA and values systems that make us want to work with them, but when you find one, there are often opportunities to do multiple things of scale. In Vietnam, we’ve also worked with Vingroup, investing in Vihomes and Vinschools. It was the same with Salim Group in Indonesia. We invested in Sari Roti, the largest bread company in Indonesia, in which they have a significant stake. We partnered with Manny Pangilinan, GIC and First Pacific, a Salim Group affiliate, on Metro Pacific Health in the Philippines. We are also the lead investor in a group that owns a significant stake in Maya [formerly Voyager Innovations], a digital bank and mobile payments ecosystem in the Philippines. PLDT, a First Pacific affiliate, is our local partner in Maya.

Q: The three most recent buyouts span healthcare, financial services, and education. Are these a fair reflection of your sector priorities in Southeast Asia?

In emerging Asia, we are solving basic problems – the provision of good quality healthcare, education, and consumer products and services. Healthcare and education tend to be the sectors that benefit as per capita GDP grows and consumer priorities evolve. These are themes we know well that provide long secular runways for growth. In addition, I think we will do more around consumer products and services and digitalisation. Maya is very much part of it because about 50% of Filipinos don’t have bank accounts, so we are providing financial inclusion through digital channels.

Q: Why are large-scale private markets investments in data centres becoming a feature of Southeast Asia?

A: Singapore is unique in that it is seen as balanced, safe, and well aligned with all key countries. Availability of energy is another factor. This translates into strong demand for data centres, mostly driven by Western customers.  A lot of the digitalisation growth you are seeing across Southeast Asia flows through Singapore. Demand far exceeds supply. Our private equity team had established a relationship with SingTel and Temasek [SingTel’s majority shareholder] and when they asked if we were open to partnering in the data centre business, our infrastructure colleagues took over. We invested alongside SingTel in STT GDC [ST Telemedia Global Data Centres] in a minority capacity in 2024 and then bought a controlling interest earlier this year.

Q: Do you expect data centre rollouts elsewhere in Southeast Asia as countries prioritise data sovereignty?

A: Singapore is well-positioned in terms of the input requirements for data centres and the comfort clients have in its ability to serve broader regional needs without impacting geopolitics. However, other countries are keen to scale data centres too and have been asking us for input. The Philippines is ramping up energy capacity to serve data centres. Indonesia is also keen, while Malaysia is already building out the Singapore-Johor corridor, and it will likely build in other places as well. Vietnam is also starting to move, focusing more on renewable energy.

Q: What impact is the fuel crisis having on these energy development plans, given the extent of Southeast Asia’s reliance on oil from the Middle East?

A: The situation is evolving every day, and we don’t know how quickly it will settle down. But we definitely bake in consumer pressure – because of inflation and challenges around energy supply chains – into our near-term underwriting. Every country in Southeast Asia is focusing more on renewables, which creates an interesting infrastructure opportunity for us, supporting that buildout. We’ve done it in other parts of Asia, notably India, and we can bring that knowledge and expertise to conversations we’re having on the PPP [public-private partnership] side and with family conglomerates that are large owners of energy assets in Southeast Asia. However, even though those conversations have accelerated, buildouts will still take time.

Q: What are the prevalent exit channels for large-cap investors in Southeast Asia?

A: Exits are one of the most significant risks and challenges in Southeast Asia – and they have held back large investments in the past to some extent. Minority investments have been particularly difficult because listing is the only option; the private equity-to-private equity channel has gone quiet because few investors want to buy minority positions. We are baking in strategic exits mostly, although we would also consider PE-to-PE and – selectively – listings.

A business like Medical Saigon attracts attention from strategics in emerging Asia and private equity sponsors. Vietnam’s healthcare market is attractive, with private healthcare accounting for a small portion of overall spending, so there is a long growth runway as well as government support. Ascend is tapping into Singapore’s savings theme and the growth in IFAs [independent financial advisors]. It is also expanding into Hong Kong. A lot of global brokers are interested in acquiring independent platforms, and then the high return on capital and strong cash flows would appeal to private equity as well. We could also list it in Singapore.

Q: Where is it easiest to do an IPO in Southeast Asia?

A: Singapore, Vietnam, and Malaysia are the more active capital markets today. There are still some liberalisation measures happening around listings by foreign-owned companies in Vietnam, while Singapore and Malaysia have taken steps to make their exchanges attractive for listings. That said, for us, IPO always tends to be a plan B, because capital markets are still maturing in terms of large listings. Recent IPOs of Sunway in Malaysia and Maynilad in the Philippines are positive developments for those markets.

Q: Singapore has introduced various measures intended to attract more IPOs, including the Equity Market Development Programme (EQDP), which makes allocations to fund managers operating in public markets. What impact will this have?

A: Malaysia has significant pools of capital that invest in local listings, supporting good companies. Historically, Singapore has been a destination for yield-generating companies and less so for high-growth companies. The government is trying to do more to attract those growth-oriented businesses and provide support through EQDP. If IPOs are successful and investors make money, the system feeds on itself. If they can get this flywheel moving, Singapore could become a credible listing option for Southeast Asian companies. Singapore enjoys good relations with other governments in the region, and while those governments may prefer to see companies list at home, an IPO in Singapore for the sake of liquidity, followed by a domestic IPO over time, could be an attractive option. It remains to be seen how rapidly the IPO numbers can grow. Singapore also has a partnership with NASDAQ [a global listing board intended to facilitate dual listings] that could be interesting for technology-oriented companies. We have some portfolio companies exploring this option.