By Tony Munroe
HONG KONG (Reuters) - As Asia's private equity market matures, U.S.-based Paul Capital Partners sees increased opportunities to buy out investors making early exits from existing funds.
Paul Capital manages about $4 billion globally in so-called secondary investments and opened its first Asia office in January.
It is looking to develop a little-known market which has accounted for a tiny share of Asian private equity deals.
Jason Sambanju, a director who opened Paul Capital's Hong Kong office, said awareness of the secondary market is growing as a tool for private equity investors to manage their holdings, which are typically governed by multi-year lockups.
"There's an increased awareness that (in) private equity, even though it's a long-term investment, there are players out there who are able to kind of step in the intermediating time between investment and exit," he told the Reuters Hedge Funds and Private Equity Summit on Tuesday.
"The investor can realize some of the gain from that initial investment but achieve near-term liquidity, and we kind of hold for the remaining period of time and see the final exit."
Sambanju said that in the United States and Europe, about 3 to 5 percent of total funds raised eventually cycle through secondary market investors such as Paul Capital. In Asia, the figure has been closer to just 1 percent, he said.
About $37 billion in private equity funds for Asia were raised last year, according to the Centre for Asia Private Equity Research Ltd. Continued...
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