Rise of 'shadow capital' despite pandemic putting Asean private equity in the shade

ONE clear trend that has emerged is that throughout 2020, shadow capital investors - who are deploying direct capital throughout the cycle - appear to be unfazed by the market turmoil, said a recent Bain & Company report this month.

A string of such investors - including Singapore's GIC and Temasek, Abu Dhabi's ADIA, family-owned Verlinvest and corporates such as Tencent - participated in South-east Asian and Asia-Pacific private equity (PE) deals throughout 2020, helping to stabilise the scene.

Shadow capital allows institutional investors to access PE assets without having to depend on general partners (GPs), giving them lower costs and increased control over their investments.