Singapore VC-PE group on mission to collate data for S-EA benchmarks

Singapore

THE Singapore Venture Capital and Private Equity Association (SVCA) is partnering US-based Cambridge Associates to assemble enough data for South-east Asian benchmarks.

It is a mission that industry observers say could draw more funds to the region's private investment space, as long as the benchmark builders can get enough fund managers to share their performance data.

SVCA vice chairman Gary Ng, who is also partner at private equity firm Altair Capital Advisors, told The Business Times that the partnership has no monetary value, but that the association will actively encourage its members to contribute data. SVCA currently counts about 79 general partners as members out of about 200 known to be in Singapore.

There is no timeline for launching the benchmarks, which depend on the ability to achieve a sample size that is sufficiently robust to allow statistical rigour and to ensure confidentiality of participants.

Institutional limited partners (LPs) lean heavily on benchmarks to support decisions to invest in funds, members of a panel discussion at the announcement event said.

Sunil Mishra, partner of Adams Street Partners, said the lack of structured data meant that private investments in the region is "a very anecdotal industry".

"Initially that was our competitive advantage, but then we realised that for mainstream LPs... to be able to allocate more capital, people need to feel confident that they know enough," he said.

It can be a challenge getting good data for these benchmarks, however. Mr Ng noted a possible risk of survivorship bias, where funds that do well contribute more data.

Cambridge Associates managing director Vish Ramaswami said that his firm uses a number of data sources, and LPs can direct their portfolio funds to contribute regardless of performance.

Still, Mr Mishra observed that Cambridge Associates' existing benchmarks for other regions were known to have a positive bias.

When asked by BT, East Ventures managing partner Willson Cuaca said poor-performing venture fund managers may have little incentive to share data. "If it's hidden, you can say whatever you want," said Mr Cuaca, who nevertheless reckoned that pressure from LPs could be a strong nudge. East Ventures has contributed data to Preqin, the market data firm.

The hope is that all players in the ecosysyem see value in benchmarking.

Ralph Keitel, principal investment officer for private equity and funds at International Finance Corp, said: "This is an industry that really lives and dies with data... There is an old saying in the industry that two LPs meet, one asks: 'How is your wife?", and the other asks: 'Compared to what?'"

Also at the event, Gillian Tan, executive director of financial markets development at the Monetary Authority of Singapore (MAS), said that from June 21 onwards, MAS will organise 17 "Deal Fridays" with Enterprise Singapore to match curated fintech and tech startups with potential investors.