Integra Partners recently held our first post-COVID era in-person event in Singapore for our Annual Investor Day on 22 September 2022. The event brought together panels of asset allocators, founders and thought leaders in the FinHealth space, and was also joined by our existing and prospective investors coming from all over the world. We had various interesting and insightful discussion topics, ranging from macro trends and perspectives of asset allocators, to financial and healthcare inclusion as well as thoughts on the Web3 and crypto space.
Macro Trends and Perspectives of Asset Allocators
We were honored to have asset allocators representing different types of investors — from sovereign wealth funds, development finance institutes, fund of funds to single family offices — to share their insights on investing in today’s macroeconomic climate. The common views shared across the various types of investors were:
From a public markets broad index performance perspective, Southeast Asia has underperformed Greater China for many years due to the lack of sizable and listed tech companies that can be included in the indices. However, this is changing as the Southeast Asia tech ecosystem matures in tandem with the rise of digital penetration across the region. All of the asset allocator guest speakers expressed optimism about the region’s growth and opportunities, with Southeast Asia already attracting a greater inflow of capital from global investors compared to past years.
The disconnect between public and private market multiples was another key topic raised during one of the panels. It is important to look at this disconnect from two angles — while it is true that the private market continues to lag behind the public market, we also have to remember the investor base of public and private markets are different. Public market investors are largely affected by their cost of financing, hence explaining the correction of the stock markets with respect to rising interest rates. On the other hand, private market investors have raised a significant amount of capital in the past two years and most are still sitting on a high amount of dry powder as the speed of getting deals done in the private markets space is naturally slower. Hence although private market investors have been more selective and raising the bar to deployment, they are still likely going to be net buyers in today’s market environment. That being said, it also depends on how long the bear market lasts. If the bear market or a serious recession goes on longer 1–2 years from now, then the private market should also see further correction.
Our asset allocator guest speakers also offered advice to company founders whom are fundraising. Besides having product-market fit and addressing a large enough market, founders’ ability to execute and to sell are also important desirable characteristics. In the Southeast Asia region especially, investors prefer founders who are comfortable dealing with ambiguity due to the highly diverse nature of the region — consisting of at least 5 investable emerging countries with different languages, cultures, infrastructure and political differences.
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Written by Jennifer Ho, Partner; Joshia Kwa, Principal; and Melissa Chen, Head of Capital Formation