Asia’s first-time fund managers have been suffering from the coldest fundraising climate ever since 2008, as investors apply a cautionary approach amid an uncertain macro environment and liquidity crunch.
Only 41 first-time managers located in Asia hit their final close in 2024, raising a total of $2 billion, according to Preqin data, which also includes yuan-denominated funds. That was the lowest level since 2008, when 77 emerging funds raised $9.8 billion.
Fundraising activity by emerging managers has been on a downward trend since peaking in 2016-2017, before hitting the 16-year-low in 2024.
The broader private equity fundraising landscape for the Asia Pacific region has also been tepid. Fund managers raised $59 billion in the first nine months of 2024, pointing to a 20-year low since 2004, when $70 billion was raised in the full year, according to Preqin’s 2025 Private Equity report published on December 11.
Compared to 2023, the first-time fundraising value was down by 80.6% while the number of funds hitting the final close was 65% less year-over-year.
Preqin believes that the overall PE fundraising in the APAC region has “bottomed out”, although investors remain wary towards China, which will continue to weigh on the overall fundraising.
Average fund size dwindles
Unlike the 2016- or the 2017 vintages, operating in a low or negative net cash flow environment has been no stranger to many of the LPs this year thanks to the reduced fund distributions.
Established fund managers in Asia have dominated the fundraising scene, accounting for 94% of the total capital raised this year. Emerging fund managers in the region only snatched 6% of the LP allocations. The meagre proportion by emerging funds hit a record low and marked a further decline from the 12.4% level recorded in 2023.
Against such a backdrop, LPs had been reluctant even to re-invest with at least one of their current general partners (GPs) over the past twelve months, per Coller Capital’s Private Capital Barometer report, with 67% of Asia-Pacific investors and 79% of global investors citing factors like institutional capital availability, performance concerns, and change in strategy.
The average fund size has dwindled sharply for regional first-time and established managers alike in 2024.
First-time managers bore the brunt spending 8.3 more months on the road to get their funds closed compared to the previous record-setting year 2016, while fund size shrunk by 75.1% during the said period.
Established fund managers had to spend 13.4 months more on the road, though the average fund size was 18.9% smaller than in 2016.
LongRiver Investments tops the first-time manager list
Notwithstanding the tough fundraising climate, several debut funds managed to stand out amid fierce competition. LongRiver Investments, a Chinese venture capital (VC) firm focusing on the healthcare and technology sectors, topped the list this year.
The Shanghai-based firm raised $385 million for its inaugural US dollar fund, roping in commitments from a diverse group of LPs, including global insurance companies and asset management firms. “Fundraising in US dollars is essentially to put yourself in rivalry with the best GPs on a global scale,” Zhang told DealStreetAsia in an interview in July.
Zhang said that LongRiver’s fundraising success could be attributed to the LPs’ conviction toward the Chinese market.
Largest First-Time Private Equity Funds Closed in 2024*
| Name | Vintage/Inception Year | Strategy | Geographic Focus | Fund Size (Million USD) | Close Date | Fund Manager | Manager Location | Industry | Verticals |
|---|---|---|---|---|---|---|---|---|---|
| LRI USD Fund I | 2022 | Early Stage | China | $385 | 2024-06-30 | LongRiver Investments | China | Diversified | IoT (Internet of Things), Manufacturing |
| Rockets Capital USD Fund I | 2022 | Venture (General) | China | $250 | 2024-06-30 | Rockets Capital | China | Industrials | Clean Technology, Electric & Hybrid Vehicles |
| Corporate Support Research Institute Fund No.1 | 2023 | Buyout | Japan | $175.3 | 2024-09-30 | Corporate Support Research Institute | Japan | Diversified | |
| China Southern Power Grid Yuexiu Dual Carbon Equity Investment Fund | 2024 | Venture (General) | China | $138.4 | 2024-05-21 | China Southern Power Grid Private Equity Fund Management | China | Energy & Utilities | Manufacturing |
| PROSPER Japan Business Growth Support Fund | 2023 | Growth | Japan | $118.6 | 2024-01-31 | PROSPER | Japan | Diversified |
(*Data as of 28th November, 2024)
Rockets Capital, a Chinese private equity firm focusing on growth stage opportunities across the smart electric vehicle (EV) industry value chain, climate technology, and frontier technology, took the second spot.
With offices in Beijing and Shanghai, Rockets Capital roped in Chinese EV maker XPeng as its anchor investor. Its $250-million debut fund hit the final close in June, according to Preqin data. Other fund sponsors include HongShan (previously Sequoia Capital China), IDG Capital, eGarden, and 5Y Capital, among others.
Japanese first-time managers see success
While China takes the largest share of proceeds when breaking down the manager location, Japan has emerged as a bright spot as it contributed to the highest number of first-time managers hitting the final close in 2024.
Nine China-located first-time managers hit a final close raising around $2.2 billion while Japan saw 17 emerging managers securing $0.7 billion, as of December 16.
Japanese buyout firm Corporate Support Research Institute (CSRI) raised 25 billion yen ($175.3 million) for its debut mid-cap fund this year.
Japan rose to be the largest PE market in Asia Pacific in 2023, according to a 2024 report published by Bain & Company. The Japanese market saw its deal value double in 2023 to JPY 5.9 trillion compared to the average deal size recorded in the past five years (2018-22), with landmark take-private deals being the key growth engine.
As global LPs and GPs eye the market, Japanese LPs have also increasingly raised their allocations towards local funds, a move seen as a “substantial shift” by industry players.
