Fund managers pivot to health, educ, tech

The shift reflects resilience in a market where volatility has become the norm.

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Fund managers in Singapore are steering more capital into healthcare, education, and technology as private equity firms adjust to slower exits and tighter deal pipelines across Southeast Asia.

The pivot reflects resilience in a market where volatility has become the norm, Bhavik Vashi, managing director for the Asia-Pacific and Middle East and North Africa at Carta, Inc., said.

Healthcare is amongst the most active private equity sectors this year, with Quadria Capital closing a $1.38b (US$1.07b) fund in May and a Temasek-backed firm acquiring a 16% stake in AC Health, the healthcare arm of Ayala Corp. in the Philippines, in August.

Healthcare accounted for 27% of Southeast Asia's $1.29b (US$1b) deal value in the second quarter, according to Luke Pais, EY-Parthenon Asean private equity leader, said demand underpins the activity.

He added that universal healthcare schemes in several countries have lifted sector prospects.

KPMG's head of asset management and private equity, Andrew Thompson, told the magazine that the shift also reflects the expansion of Southeast Asia's middle class, which is driving long-term structural demand for healthcare and education.

He noted that as incomes rise, more households are spending on private health and training services. A 2021 United Overseas Bank report projected that 65% of Southeast Asia's population will achieve middle-class status by 2030, strengthening the investment outlook for both sectors.