Asia's Private Companies Show Potential for 2025 Recovery Amidst Current IPO Challenges

According to Lee, there are 140,000 private companies with annual revenues exceeding $100 million, in contrast to just 19,000 public companies achieving similar figures. This observation was made during a CNBC Delivering Alpha event last month.

Experts argue that Asia's "nascent capital market" requires a catalyst to stimulate growth. Jenny Lee, founder and senior managing partner at Granite Asia, a Singapore-based venture capital firm, emphasized that increasing the number of products, information, fund managers, and reputable issuers is essential for more listings in the region.

Lee suggests that introducing a standout company, likened to a "Taylor Swift of IPOs," could accelerate the IPO market through its listing.

Looking ahead, Lee is optimistic regarding the performance of private companies in 2025, especially after what she describes as a "terrible year" in 2024, as strong fundamentals and favorable listing windows are anticipated.

High interest rates in 2024 have significantly limited IPO activities in mature markets, including the U.S., China, Hong Kong, and parts of Asia, with the exception of Japan and India. Furthermore, the backdrop of numerous elections has contributed to economic uncertainty.

Comparatively, IPO activity in Asia has further declined in 2024, with a reported decrease of 35% in deals and 51% in proceeds year-on-year, according to data from EY.

However, some regions show promising signs; India has led with 327 listings, while Japan and South Korea also experienced notable IPO activities with 84 and 75 listings respectively, based on the same data.

Serena Tan, CEO and co-founder of Gaia Investment Partners in Malaysia sees promising growth in sectors like health tech and preventive care, which are projected to attract significant investment as the demand for healthcare services rises to $2.3 trillion by 2026. She noted that one in four individuals in the Asia-Pacific region will be at least 60 years old by 2050, as reported by the Asian Development Bank.

At the same event, Tan predicted that Asian funds would raise $30 billion in private equity this year, led by firms such as Blackstone, KKR, and EQT, with a considerable portion flowing into India and Japan.

Nevertheless, she advises keeping a close watch on China for emerging opportunities arising from global dislocations, which can result from changes in leadership or technological advancements. Examples include the implications of U.S. President Donald Trump’s proposed tariffs and developments in AI by Chinese startup DeepSeek.