How the denominator effect is clouding PE fundraising in SE Asia

Private equity (PE) fundraising may continue to be tardy this year as the so-called ‘denominator effect’ makes several limited partners (LPs) rethink their allocations. And, Southeast Asia will be no exception.

With fundraising already in a slow mode due to the COVID-19 pandemic, many general partners (GPs) in the region are now being tested again with LPs reducing allocations to less liquid asset classes such as private equity due to the denominator effect from the public markets, which have corrected significantly over the past year.