Analysis: Iran Conflict May Intensify Financing Crisis in Asian Private Equity

On March 27, CNBC reported that several industry insiders stated that the turmoil in Iran, which is sweeping global markets, has introduced new uncertainties that could weaken the recently revived investment enthusiasm for Asian private equity. Andrew Thompson, head of asset management and private equity for KPMG Asia Pacific, noted, “What we are seeing now is quite similar to the tariff situation at the beginning of last year—people will pause, slow down, and choose to wait to avoid being impacted by any sudden shocks.” In the context of increasing uncertainty, investment funds in the Middle East (a major source of capital in the global private equity sector) may also temporarily slow down their foreign investments, and will not engage in large-scale overseas investments at least in the short term. Thompson stated, “Now is not the time for fundraising exploration. They need to address more issues right now.” According to a report released by Bain & Company this week, funds raised by private equity firms focused on the Asian market fell to nearly a decade low of $58 billion last year, marking the fourth consecutive year of a funding decline.