Caroline Baker talks to Asian Private Banker about private equity trends in Asia

7 April 2020
The private equity (PE) industry is under pressure nowadays due to macro influences such as regulatory changes and political tension impacting fund manager’s decision-making process.

Vistra’s latest PE research revealed that 71% of industry professionals felt that increased demand for greater information flow has the stronger impact on the global industry.

Caroline Baker, Vistra’s Managing Director of Alternative Investment in Asia recently discussed the key trends identified by the report with private wealth management publication Asian Private Banker.

She explained that the volume of information required are increasing and becoming more diverse – with investors wanting data streams to develop their own reports, and issues around portfolio transparency creating demands for better-quality information.

In order to reduce the inefficiency of reacting on each data requests, she saw an increased usage of the Institutional Limited Partners Association (ILPA) reporting template on fund information disclosure, which is so far the only set of guiding standards in the industry.

She believed that by completing the ILPA reporting template, most questions raised by both clients and regulators would be answered. She foresaw that this template will soon be adopted in Asia since the format includes a lot of information that investors have asked for and that standardised reporting could effectively reduce costs.

Apart from demand for greater information flow, increasing regulation is another leading trend impacting the PE industry according Vistra’s research. 

Global regulatory requirements, such as AIFMD, FATCA and anti-money laundering regulations, as well as regulations imposed by local authorities, such as the Monetary Authority of Singapore, are said to have put the onus on the principle to answer to the regulators. As a result, PE firms are required to step up their internal controls measures.

“Counterparty risk too was an area of focus for regulators” said Caroline, in which they examined the governance of firms with which the PE funds work.

Despite the understandable concerns among PE professionals, the research showed that the industry shows clear optimism. It is believed that drivers such as the growing trend of co-investment, ESG and the move to transparency will keep the sector moving forward.

Click here to read the full article as appeared on Asian Private Banker or download the full research report here.