Wealthy Asians turn to secondary private equity amid uncertainties - South China Morning Post

Wealthy Asian investors are driving substantial capital flows into the secondary private-equity market, a $210 billion asset class historically dominated by institutional investors. According to Christian Bucaro, Franklin Templeton's head of wealth for Asia, Asian subscribers—including investors from Hong Kong and Singapore—now represent more than half of all subscriptions to a $1.2 billion secondary fund co-managed by Franklin Templeton and Lexington Partners. The fund achieved 37% asset growth since its launch earlier in 2025, underscoring rapid market traction.

The surge reflects a deliberate asset allocation response to multiple headwinds. Geopolitical tensions, economic uncertainty, and short-term risks including tariffs and regional conflicts have prompted high-net-worth individuals to diversify beyond traditional public equities and bonds toward alternative strategies offering both cash flow and capital preservation. Secondary private equity—which involves purchasing existing private-equity fund stakes and portfolios at discounts to estimated fair value—appeals to this cohort by providing exposure to mature, cash-generating assets with lower volatility profiles than primary fund commitments.

Structural innovation in fund design is accelerating adoption. The Franklin Templeton–Lexington Partners fund employs an "evergreen" structure enabling monthly subscription and quarterly redemption flexibility, directly contrasting closed-end funds that lock investor capital for extended periods until underlying assets exit. This liquidity feature addresses a critical pain point for wealthy individuals accustomed to liquid wealth and portfolio rebalancing. The market opportunity has intensified competitive fundraising activity: Ardian, the Paris-based alternative asset manager, launched a global evergreen secondary and co-investment fund targeting private wealth clients in July 2025, while Coller Capital opened an evergreen secondaries offering to Deutsche Bank wealth clients across Asia, Europe, the Middle East, and Africa in May 2025.

This broader trend reflects a fundamental repositioning of private markets participation. Wealthy individuals, traditionally conservative allocators, are stepping beyond public markets toward non-traditional alternatives for longer-term value creation and risk mitigation. Secondary private equity uniquely combines this appeal—offering discounted entry pricing, diversified portfolio exposure, and near-term cash distributions—positioning it as a natural destination for Asia's affluent investors navigating macroeconomic and geopolitical uncertainty.