CEPRES: Asian fund managers have performance edge

In Asia Pacific, Asian fund managers beat foreign managers on growth and venture deals.

Who are you better off investing with in Asia for the highest returns – an Asian or foreign manager?

It depends on the investment strategy, according to research firm CEPRES. 

Asian managers show higher returns with venture, growth and other (turnaround, special situations), whereas Western managers have an edge on returns when it comes to buyouts in Asia. 

“This could be based on more sophisticated financial engineering being used by Western managers, especially during the peak buyout period to enhance returns, whereas local managers show perhaps more skill at enhancing and growing the underlying businesses needed for venture and growth strategies,” says Christopher Godfrey, partner at CEPRES.

In the chart below, CEPRES calculated the gross IRR returns for investments made in companies in Asia only, across more than 2100 deals in the region based on historical data going back to 2000. Pooled IRR is a statistical representation of what actual gross returns would be if invested in the specified strategy.

The figures also suggest that Asian fund managers have discipline and professionalism, and have evolved well beyond emerging market managers.

Asian Managers

% of deals

Pooled

IRR

 

 

 

Venture Capital

43.85%

22.85%

 

 

 

Growth

18.87%

46.56%

 

 

 

Buyout

24.11%

19.99%

 

 

 

Others/Unspecified

13.16%

23.27%

 

 

 

All

100.00%

23.31%

 

 

 

 

 

 

Foreign Managers

% of deals

Pooled IRR

 

 

 

Venture Capital

76.33%

15.79%

 

 

 

Growth

5.17%

17.62%

 

 

 

Buyout

15.39%

30.71%

 

 

 

Others/Unspecified

3.10%

7.04%

 

 

 

All

100.00%

19.32%

 

 

 

 

 

All Managers

% of deals

Pooled

IRR

 

 

 

Venture Capital

56.19%

19.96%

 

 

 

Growth

13.67%

37.83%

 

 

 

Buyout

20.80%

21.49%

 

 

 

Others/Unspecified

9.34%

21.19%

 

 

 

All

100.00%

22.27%