How Secondary Markets and Strategic Buyers Create Liquidity

When Navis Capital Partners closed a $230 million continuation vehicle for its Southeast Asian K-12 school portfolio and ChrysCapital structured a $700 million Continuation Vehicle (CV) to retain its NSE stake, they weren’t signalling market dysfunction. They were engineering liquidity through mechanisms that preserve carry whilst addressing LP capital constraints.

Private equity portfolios across Southeast Asia hold $95 billion in unrealised value as traditional exit channels remain constricted. Yet between 2023 and 2024, the region witnessed $12 billion in General Partner (GP)-led secondary transactions, $8 billion migrating to continuation funds and $18 billion in strategic M&A exits. Understanding why these new channels emerged requires examining the capital now trapped in aging portfolios.

The Exit Overhang: Why $95 Billion Remains Trapped

Southeast Asia’s private equity assets under management reached $180 billion in 2024, with $95 billion in unrealised portfolio value – companies acquired between 2018 and 2022 that remain unsold as market conditions shifted, according to Bain & Company and Preqin data.

The pressure is structural. Limited Partners (LPs) facing capital calls whilst distributions lag historical norms are scrutinising GPs’ exit capabilities. Fund lifecycles approaching years 8-10 threaten GP economics and future fundraising. Portfolio companies acquired at 8-10x EBITDA now justify 10-12x EBITDA valuations through operational improvements. Yet, traditional exits remain blocked. Southeast Asian IPO activity sits 45% below 2021 levels, whilst strategic buyers have grown selective.

This mismatch between portfolio maturity and exit availability created demand for alternative liquidity mechanisms. GP-led secondaries emerged as the solution.

GP-Led Secondaries: From Distressed Tool to Strategic Exit

Asia-Pacific GP-led secondary transactions reached $35 billion in 2024, with Southeast Asia accounting for $12 billion, according to Evercore, Lazard and Campbell Lutyens data. Single-asset continuation vehicles accounted for $36 billion globally, nearly doubling from the prior year. What began as emergency liquidity mechanisms has evolved into deliberate portfolio management.

The commercial logic is compelling. A sponsor holding a Southeast Asian fintech platform acquired in 2019 at 9x EBITDA, now valued at 15x EBITDA with paths to 18-20x through regional expansion, faces constrained options. A strategic sale at 12-13x leaves upside on the table. An IPO remains uncertain. A continuation vehicle solves both: existing LPs receive immediate liquidity at fair value whilst the sponsor retains the asset with fresh capital to pursue full value creation.

Transaction structures have matured. Early Asian GP-led deals cleaned up legacy portfolios at steep discounts. Current transactions target “trophy” assets – market leaders with defendable positions. Pricing reflects this shift: transaction-weighted average discounts narrowed to 13.3% in H1 2025, with mega buyout funds trading at 9% discounts.

The most sophisticated form – ⁠the continuation vehicle – addresses the fundamental mismatch between fund duration and Southeast Asian value creation timelines.

Continuation Funds: Extending Duration Without Sacrificing Returns

Between 2023 and 2024, $8 billion in Southeast Asian PE assets transferred to continuation vehicles, according to Evercore, Campbell Lutyens and PJT Partners data. These are deliberate portfolio management tools aligning GP and LP incentives around long-term value creation whilst providing immediate liquidity.

Traditional PE funds operate on 10-year cycles. Southeast Asian companies often require longer; regulatory approvals take 18-24 months, market consolidation plays out over 5-7 years. Continuation vehicles provide this duration without violating fund mandates or forcing value-destroying premature sales.

A healthcare platform spanning Indonesia, Vietnam and the Philippines, acquired in 2020 at $300 million, now generates $50 million EBITDA with paths to $100 million EBITDA through M&A rollup. A traditional exit at 10x yields $500 million. A continuation vehicle allows the sponsor to provide existing LPs immediate liquidity whilst pursuing higher EBITDA targets with fresh capital, potentially exiting at 11-12x in 2027-2028.

LP participation remains modest – approximately 10% roll into CVs, according to Campbell Lutyens data, creating opportunities for secondary buyers comfortable with concentrated positions.

Whilst GP-led secondaries provide sophisticated liquidity engineering, traditional strategic M&A remains the most reliable exit mechanism for sponsors seeking complete, certain exits.

Strategic M&A: Japanese, Korean and Chinese Buyers Create Liquidity

Strategic M&A exits totalled $18 billion in 2024, demonstrating that corporate acquirers still provide the clearest path to complete liquidity, according to Refinitiv and Mergermarket data. The buyer universe segments into three groups pursuing different strategic rationales.

Japanese corporates – ⁠trading houses (Mitsubishi, Mitsui) and industrials (Hitachi, Panasonic) – view PE-backed companies as regional expansion vehicles, targeting logistics platforms, renewable energy developers and B2B software. Korean chaebols (Samsung, LG, SK Group) focus on semiconductor supply chain companies and battery material processors to secure manufacturing capacity. Chinese buyers (Alibaba, Tencent, ByteDance) target digital economy assets, though regulatory scrutiny around data sovereignty has narrowed opportunities.

Strategic buyers consistently pay 10-12x EBITDA for market-leading assets with clear synergies. Second-tier assets command 7-9x. The challenge isn’t pricing. It’s timing and certainty. M&A processes consume 6-12 months and face collapse risk. Sophisticated GPs run dual-track processes – negotiating strategic sales whilst preparing continuation vehicles as backstop options.

This exit activity functions efficiently because of infrastructure Singapore has deliberately constructed.

Singapore’s Infrastructure: Asia’s Secondary Market Hub

Singapore’s emergence as the regional hub reflects deliberate policy. The Variable Capital Company (VCC) structure provides flexibility unavailable elsewhere; umbrella structures with segregated sub-funds, tax transparency and simplified reorganisations critical for continuation vehicles. Leading secondaries houses – Coller Capital, Ares, Apollo – established Singapore offices to leverage this.

Secondary advisory capabilities matured in parallel. PJT Park Hill, Evercore, Jefferies and Morgan Stanley built dedicated Asia GP-led teams over 2023-2024, primarily in Singapore. This provides sophisticated advisory support – structuring CVs, negotiating LP terms, sourcing buyers – previously available only in London or New York. Southeast Asian GP-led deals now close in 4-6 months versus 9-12 months historically.

With infrastructure operational, sponsors face the practical question: which exit strategy matches which portfolio asset?

Decision Framework: Matching Exit Strategy to Portfolio Position

For Sponsors with Trophy Assets (Market Leaders, High Growth)

Continuation vehicles offer optimal economics. Assets valued at 12-15x EBITDA with credible plans to reach 15-18x justify extended hold periods. Target candidates: fintech platforms with 40%+ market share, healthcare rollups approaching consolidation end-states, logistics networks expanding into underserved geographies. Valuations typically command 8-10% discounts to NAV.

For Sponsors Seeking Immediate Liquidity (Fund Approaching End-of-Life)

Strategic M&A provides certainty. Japanese corporates, Korean chaebols and Chinese buyers consistently pay 10-12x EBITDA for quality assets with identifiable synergies. The process consumes 6-12 months but delivers complete exits. Critical success factors: quantifiable synergies, clean regulatory profiles, and management teams willing to integrate. Dual-track processes maximise optionality.

For Sponsors with Mid-Tier Assets (Solid But Not Trophy)

LP-led secondaries create portfolio liquidity. Rather than selling companies directly, sponsors facilitate LP portfolio sales at 85%-90% NAV, providing investors exits whilst retaining GP upside. Transaction volumes reached $121.5 billion globally in 2025, according to Jefferies data. This works particularly well for diversified portfolios where 2-3 assets drive most value but smaller positions create drag.

Looking Forward: Secondaries as Permanent Infrastructure

Global secondary transaction volume reached $225 billion in 2025, up 45% from 2024, according to Campbell Lutyens. This is permanent infrastructure addressing the mismatch between PE fund durations and value creation timelines.

Three catalysts will drive Southeast Asian secondary growth through 2026-2028: 2020-2022 vintage funds reaching years 3-5 (the optimal CV window), persistent LP capital constraints despite ongoing calls for new funds and strategic buyers increasingly viewing PE-backed companies as viable acquisition targets.

The critical question for Southeast Asian GPs isn’t whether secondary markets create liquidity – the $12 billion in GP-led transactions and $8 billion in continuation funds demonstrate this. The question is whether sponsors engineer portfolios with secondary optionality from acquisition, structure governance to support eventual CVs and build relationships with buyers capable of executing complex transactions.

The $95 billion in unrealised Southeast Asian PE value won’t monetise through IPOs alone. It will exit through strategic M&A for certain liquidity, GP-led secondaries for value preservation, and continuation vehicles for duration extension; engineered by sponsors who recognise that exit optionality now determines IRR outcomes as much as operational value creation.

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When TotalEnergies committed $4 billion to Vietnam’s offshore wind programme and Shell announced partnerships across Thailand’s solar corridors, they weren’t following ESG mandates. They were recalculating the levelised cost of energy against tariff structures, grid integration risks and sovereign guarantees. The arithmetic has fundamentally shifted.

The International Energy Agency’s Southeast Asia Energy Outlook indicates the region requires at least $200 billion in clean energy investment by 2030 to align with Paris Agreement trajectories. Yet the decision matrix facing institutional investors, project developers and equipment manufacturers evaluating Indonesia, Vietnam, Thailand, Malaysia and the Philippines isn’t about chasing renewable targets. It’s about engineering bankable projects that survive both regulatory flux and offtaker credit risk.

The Economics of Southeast Asian Renewables

ASEAN’s renewable ambitions aren’t speculative. They’re driven by economics and energy security. Regional electricity demand is projected to grow 41% by 2030, according to Ember’s clean energy analysis, whilst domestic fossil fuel reserves decline and import dependency creates balance-of-payments pressure. Solar’s levelised cost has fallen 55-81% across the region since 2012, making it cheaper than imported coal in Malaysia and competitive with gas in Thailand.

Project finance for ASEAN renewables has improved markedly, with better power purchase agreement (PPA) frameworks and grid integration reducing investor risk. Yet between 2021 and 2023, the region attracted only $45 billion in cumulative investment; far short of what’s required, according to analysis by Standard Chartered.

Country-by-Country Analysis: Five Distinct Propositions

Indonesia: Market Scale with Execution Challenges

Indonesia’s RUPTL 2025-2034 targets 42.6 GW of new renewable capacity by 2034, with solar accounting for 17.1 GW, followed by hydro (11.7 GW), wind (7.2 GW) and geothermal (5.2 GW). The Just Energy Transition Partnership (JETP) aims to mobilise $20 billion in international finance for clean energy transition.

Yet execution remains uneven. Renewable energy investment reached only $565 million in the first half of 2024 – less than a quarter of the $2.4 billion directed to mineral and coal sectors, according to the Centre for Research on Energy and Clean Air. State utility PLN’s reluctance to implement earlier targets, combined with regulatory fragmentation between central and provincial governments, creates permitting bottlenecks.

For developers, Indonesia offers domestic market access – 280 million consumers – but demands patient capital willing to navigate bureaucratic complexity and PLN’s preferential treatment of fossil-fuel capacity. Manufacturing wages average 3.27 million IDR monthly (approximately $200), making operations cost-competitive, but offtaker risk remains elevated.

Vietnam: Ambition Meets Grid Constraints

Vietnam’s revised Power Development Plan VIII sets aggressive targets: onshore and nearshore wind capacity of 26-38 GW by 2030, offshore wind at 17 GW, and battery storage jumping to 10-16.3 GW from a previously planned 300 MW. The plan requires $135 billion in investment through 2030.

The challenge is grid absorption. Vietnam’s renewable boom – solar capacity surged from near-zero in 2017 to 22.9 GW in 2020 under generous feed-in tariffs – overwhelmed transmission infrastructure, causing curtailment issues. The government’s response: prioritising grid modernisation and battery storage to integrate variable renewable energy safely.

For project developers, Vietnam’s $15.5 billion JETP provides financing frameworks, whilst direct power purchase agreements (DPPAs) allow corporate offtakers to contract directly with generators. Manufacturing wages average 7.7-8.4 million VND monthly ($294-$321), and industrial power demand from electronics and textile sectors creates genuine offtake demand beyond government PPAs.

Thailand: Mature Market with Regulatory Clarity

Thailand’s draft revised Power Development Plan 2024 targets 51% renewable electricity by 2037, with approximately 50 GW of new renewable capacity and 14 GW of energy storage. Solar will dominate – 39 GW of ground-mounted and floating installations – complemented by 9 GW wind, 5.5 GW biomass and 3 GW hydro.

Thailand’s advantage is predictability. The Energy Policy and Planning Office (EPPO) provides clear auction mechanisms, feed-in tariffs and direct PPA frameworks. The Asian Development Bank’s $820 million loan package for solar-plus-storage projects demonstrates international confidence in Thailand’s regulatory stability.

Grid infrastructure is advanced – the Map Ta Phut LNG terminal handles 11.5 million tonnes annually – and manufacturing capacity for PV cells sits at 10 GW annually with $4.3 billion export value. Manufacturing wages average 14,530 baht monthly (approximately $424), reflecting a quality premium, but operational reliability and established supplier ecosystems justify the cost.

Malaysia: Infrastructure Excellence with Corporate PPA Momentum

Malaysia’s National Energy Transition Roadmap (NETR) targets 35% renewable electricity by 2030 and 40% by 2035, requiring approximately 32 GW of new renewable capacity and $47 billion in investment through 2030. The government’s 13th Malaysia Plan (13MP) allocates $100 billion for overall energy transition, demonstrating binding commitment rather than aspirational targets.

Malaysia’s competitive advantage is infrastructure maturity. Ranked second overall in Dezan Shira & Associates’ 2026 Asia Manufacturing Index, Malaysia combines world-class ports (Port Klang, Tanjung Pelepas) with advanced grid reliability. State utility TNB’s $10.2 billion grid modernisation programme – 64% earmarked for inter-regional circuits and system operator tools – addresses the primary bottleneck constraining VRE integration.

The corporate PPA market is accelerating. Data centres, semiconductor fabs and multinationals are contracting 15-25 year renewable PPAs under the Corporate Green Energy Supply Program (CRESS), creating creditworthy offtake independent of utility contracts. ACWA Power’s $10 billion commitment and Chinese energy firms’ $2.82 billion Sarawak investments signal sustained foreign appetite.

Manufacturing wages average 3,492 MYR monthly (approximately $760) – higher than regional peers but justified by operational reliability, established supplier networks and a 52 GW solar PV manufacturing capacity that positions Malaysia as ASEAN’s equipment hub. For developers prioritising execution certainty over labour arbitrage, Malaysia offers Thailand-level predictability with stronger manufacturing integration.

Philippines: Corporate PPA Momentum with Infrastructure Gaps

The Philippine Department of Energy’s National Renewable Energy Program targets 35% renewable generation by 2030 and 50% by 2040. Between 2025 and 2030, $26.2 billion is expected in power sector investment, with solar PV accounting for 38.8%, onshore wind 19.4%, and offshore wind 17%.

The Green Energy Auction Program (GEAP) and Green Energy Option Program (GEOP) facilitate corporate PPAs, allowing businesses to contract directly with renewable generators, a critical enabler for creditworthy offtakers. Masdar’s $15 billion commitment for solar, wind and battery storage projects targeting 1 GW by 2030 signals international appetite.

However, transmission bottlenecks persist outside Metro Manila, and the “Build Better More” programme’s $26 billion infrastructure allocation (over 5% of GDP) addresses decades of underinvestment. Factory wages average PHP 19,500 monthly (approximately $342), competitive for operations, whilst English proficiency and technical skills suit equipment manufacturing and project management roles.

Decision Framework: Matching Strategy to Risk Appetite

The choice isn’t binary between markets. Leading developers now operate multi-country portfolios, hedging regulatory risk across jurisdictions whilst leveraging technology platforms.

For Development Finance Institutions and Patient Capital (7-10 Year Horizon)

Thailand, Malaysia and Vietnam offer the clearest paths to bankable utility-scale projects. Thailand’s regulatory maturity and Malaysia’s infrastructure excellence support gigawatt-scale solar and wind farms with predictable timelines. Malaysia’s TNB grid modernisation and Thailand’s EPPO frameworks eliminate major execution bottlenecks. Vietnam’s grid modernisation plans and JETP financing create opportunities in transmission infrastructure and battery storage, essential enablers for the renewable build-out.

These markets reward long-term commitment with lower execution risk. Expect competitive auction pricing but manageable permitting processes and creditworthy offtakers. IFC, JBIC, KfW and ADB are actively co-financing projects, providing political risk insurance and local currency hedging.

For Private Equity and Strategic Investors (3-5 Year Horizon)

The Philippines and Indonesia present higher-risk, higher-return opportunities. The Philippines’ corporate PPA market – driven by Renewable Portfolio Standards requiring utilities to source 2.52% annually from renewables – creates immediate demand. Industrial and commercial consumers with strong balance sheets (data centres, manufacturing facilities, mining operations) seek long-term contracts to hedge against grid volatility.

Indonesia’s scale is compelling for developers willing to navigate bureaucracy. Provincial governments in East and South Kalimantan are prioritising renewable projects to diversify coal-dependent economies. Early movers securing land rights and grid connection approvals will command structural advantages as competition intensifies.

For Equipment Manufacturers and EPC Contractors:

All five markets offer deployment opportunities, but timing differs. Vietnam, Thailand and Malaysia are executing now – solar installations, wind turbine procurement, and battery storage systems represent immediate revenue. Malaysia’s 52 GW solar PV manufacturing capacity creates opportunities for localisation partnerships and service contract integration. Indonesia and the Philippines are 18-24 months behind on large-scale deployment but front-loading equipment supply chains.

Vestas, Siemens Gamesa, Longi and JinkoSolar are establishing regional assembly facilities and service centres, recognising that localisation requirements will tighten. Proximity to projects reduces logistics costs and positions manufacturers for long-term service contracts; increasingly, the higher-margin business.

Looking Forward: The 2026-2028 Execution Window

ASEAN’s renewable trajectory is underpinned by converging fundamentals that create genuine opportunity rather than speculative positioning.

First, technology economics have crossed the threshold. Solar and wind are now the cheapest new sources of electricity across the region, and battery storage costs are declining 15%-20% annually. This isn’t subsidy-dependent development. It’s economically rational grid expansion.

Second, grid infrastructure is improving. The ASEAN Power Grid Financing Initiative – backed by $10 billion from ADB and $2.5 billion from the World Bank – is funding transmission upgrades and cross-border interconnections. Vietnam’s Long Thành Airport (opening 2026) and Malaysia’s semiconductor corridor expansions will drive industrial electricity demand, justifying grid investments.

Third, corporate procurement is accelerating. Multinational manufacturers – particularly in electronics, automotive and data centres – face Scope 2 emission targets that require renewable electricity. Direct PPAs are now standard practice, creating creditworthy offtake independent of utility contracts.

Most importantly, DFI mobilisation is materialising. The JETPs for Indonesia ($20 billion) and Vietnam ($15.5 billion) aren’t pledges. They’re deployment vehicles with Comprehensive Investment and Policy Plans specifying project pipelines, regulatory reforms and financing structures.

The window for advantageous positioning is now. Developers securing grid connection approvals, equipment manufacturers establishing local assembly capacity, and investors building relationships with creditworthy offtakers will command structural advantages as policy clarity improves and competition for prime sites intensifies.

The question isn’t whether ASEAN reaches 100 GW of new renewable capacity by 2030. It’s whether your organisation has engineered the project finance structures, regulatory relationships and technical capabilities to capture its proportionate share of the $200 billion deployment.

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