In a fireside chat that revealed a massive, overlooked niche, Yuliang Chen, Founding Partner of Bee Alternatives, provided a masterclass on the unique dynamics of Asia’s secondary market. Unlike the hype-driven GP-led deals, Chen’s focus is on the foundational, yet underserved, world of LP-led secondary transactions—a segment representing over 70% of Asia’s activity but only 2% of global volume.

With offices in Tokyo and Kuala Lumpur, Chen outlined why localized expertise and a partnership mindset, not just capital, are the keys to unlocking this emerging opportunity.

Here are the key topics and takeaways for LPs, GPs, and investors eyeing Asia.

The Asian Secondary Paradox: A $200 Billion Global Market, A $4 Billion Asian Niche

Chen framed a striking contrast that defines the market:

• The Global Stage: Secondary transaction volume hit ~$200 billion globally in 2024.

• The Asian Reality: Transactions involving Asian assets account for a mere ~2% of that total.

• The Hidden Opportunity: However, Asian-based sellers (LPs investing globally) drive up to 10% of global volume. This disconnect reveals a market where local sellers are active, but dedicated local secondary buyers are scarce.

The Core of Asia’s Market: LP-Led Transactions (For Now)

While the global market is split 50/50 between GP-led and LP-led deals, Asia remains a traditional, LP-led stronghold. Chen identified the most active sellers driving this segment:

• First-Time & “Small-Cap” Sellers: The market is seeing an influx of family offices, corporates, and government-linked agencies in Singapore, Hong Kong, and across Southeast Asia looking to recycle capital from their first-ever PE/VC fund commitments.

• The “Underserved” Niche: These sellers often have portfolios sized between $10-$50 million—too small for global secondary behemoths and their advisors to prioritize, creating a gap for specialized firms like Bee Alternatives.

• Strategic vs. Financial Sellers: Chen highlighted a key Asian nuance: many Japanese LPs (e.g., banks) invest for strategic relationship-building (future loans, IPO mandates) alongside returns. When a fund’s investment period ends, they may sell to free up capital to build new relationships with the next wave of GPs.

The Winning Strategy: Localization and Partnership, Not Just Pricing

In a market where relationships are currency, Chen argued that success hinges on more than writing checks.

• Barrier to Entry: Local Roots. “Asian is big. You still need to be pretty much localized.” Bee Alternatives operates in Japanese in Japan and engages directly across Southeast Asia, positioning as a local solution provider.

• From Transaction to Partnership: The goal is to become a trusted platform and “friend” to LPs, understanding their unique pain points (liquidity needs, strategic rebalancing) long before a sale is on the table. “We don’t talk to them only because there is a pipeline.”

• The Dual-Hat Advantage: As a secondary buyer that also operates as a fund manager (GP), Bee Alternatives claims a neutral, understanding position—they comprehend both the LP’s need to sell and the GP’s concerns about their cap table.

Bullish on Japan, Cautious on the GP-Led Hype

Chen provided a clear geographic and strategic outlook:

• Japan as the Near-Term Engine: For the next 1-2 years, Chen is most bullish on Japan due to asset quality, market scalability, and the high volume of strategic LP sellers looking to recycle capital.

• A Reality Check on GP-Led in Asia: While GP-led deals are the hot topic, Chen urges caution. Truly “clean” GP-led deals (with strong assets, alignment, and GPs) in Asia are rare and often price at par or with minimal discounts. “If we want at least 20-25% IRR… how feasible is that if we’re acquiring the assets in Asia with almost no discount?”

The Future Landscape: Specialization and Enduring LP-Led Demand

Chen predicts a bifurcated future for Asia’s secondary ecosystem:

• GP-Led Growth: More managers will enter the competitive GP-led space, following global trends.

• Enduring LP-Led Core: However, the traditional LP-led market for smaller, complex transactions will remain crucial and less crowded. Firms that perfect the localized, high-touch model for serving “underserved” Asian LPs will hold a defensible position.

Key Takeaways for the Industry:

• For Asian LPs (Family Offices, Corporates): You are not alone in seeking liquidity. Specialized secondary buyers exist for portfolios under $50M. Look for partners who offer solutions, not just bids.

• For Global Secondary Funds: The vast Asian LP base is already active in the global secondary market. Winning their business requires a localized, tailored approach beyond just having a regional office.

• For Talent: Success in LP-led secondaries requires a blend of hard skills (PE, modeling) and exceptional soft skills—listening, creativity, and problem-solving—to structure win-win solutions for sellers.

• The Bottom Line: Asia’s secondary market isn’t just a smaller version of the West. It’s a relationship-driven, LP-centric arena where the winners will be those who build trust locally and master the art of the bespoke, smaller-ticket transaction.