Private markets have entered a period of sustained uncertainty with macroeconomic and geopolitical pressures weighing on deal underwriting. Investors are being more selective in their deployment decisions, focusing on business model resilience, evolving risk factors and exit scenario planning. Similar questions are being asked of existing portfolio companies, especially given extended holding periods and ongoing liquidity needs. Ultimately, managers must demonstrate they can tread a fine line between strategic discipline and adapting to circumstance. 

• Have internal processes changed in response to external volatility? 
• To what extent is risk pricing shifting across regions and asset classes? 
• What is the outlook for liquidity over the next 12 months? 
• Where does Asia – and South Korea – sit in a global context?

Investment opportunities in South Korea are often viewed through the prism of domestic reforms and international expansion. Private equity continues to feed on succession planning and divestments, aided by issues like inheritance tax. Some hope that the Corporate Value-up Program, intended to boost stock prices, will facilitate more take-private and carve-out activity. Sector expertise remains a must-have, but there’s also a recognition that success is founded on the ability to scale – and address complexities – overseas.   

• How are M&A and public market trends influencing PE behaviour? 
• Can Value-up do for Korea what similar reforms are doing for Japan?
• How is private equity leveraging global appetite for Korean products?
• What opportunities will define the next phase of Korean private equity?

Selling a GP stake is not just about succession planning. Proceeds might be used to launch a new business line, support internal commitments to funds, or develop capabilities. Choosing the right partner is important because capital comes with promises of fundraising support and strategic input. These questions are pertinent in a Korea context not only as local managers consider their options, but as local LPs mull allocations to a growing class of GP stakes investors.  

• What do GP stakes firms want to see in their target managers?
• How do external investors exert influence over founder-led managers?
• What are the major challenges in structuring these deals? 
• How do GP stakes strategies bring diversification to an LP portfolio?

South Korea’s industrial capabilities in artificial intelligence-related hardware – not least semiconductors – form an advantageous proving ground for VC strategies rooted in deep tech. Local managers can also rely on policy support, notably the National Growth Fund, which is expected to channel some of its USD 100bn-plus budget into fund commitments. But this should not detract from concerns about elevated valuations in some market segments, potentially volatile sources of growth funding, and constrained exit routes.

• How is policy-backed capital impacting venture capital?
• Are there enough participants in each tier of Korea’s VC market?
• Which areas of deep tech deliver the most attractive opportunities?
• How viable are IPO exits on domestic stock exchanges?  

Responding to artificial intelligence disruption, whether threat or opportunity, is a value creation imperative as well as a due diligence consideration. It joins a long list of operational action points that span management upgrades, cost efficiencies, product portfolio revitalisation, and digital transformation. Working against a challenging macro backdrop, investors must decide what to prioritise. Those without a clear strategy – and the resources to execute it – on day one may find they are forever playing catchup. 

• Which operational strategies are delivering consistent results? 
• How is AI being implemented at the portfolio level? 
• What does global expansion look like amid heightened volatility? 
• How do GPs use external consultants in value creation efforts? 

Extended holding periods and delayed exits have become a feature of PE globally, which means investors must think carefully about the mode and timing of liquidity events. Exit channel availability varies by geography within Asia – India has been good for IPOs, strategic appetite for assets has held up well in Japan, Australia accounts for the bulk of continuation vehicles raised to date – but there will be a market for any quality asset if positioned correctly.

• Have valuation expectations adjusted enough to facilitate deal flow?
• What indicators do investors use to assess exit readiness? 
• Is Asia still underpenetrated in terms of sponsor-to-sponsor exits?
• How is the secondaries market evolving to meet investor needs?

Investment options within alternatives are plentiful, but picking partners is far from straightforward. Liquidity issues have prompted many LPs to reconsider their risk appetites, while changing macro conditions mean track records say little about likely future outperformance. Moreover, the industry is grappling with megatrends, from consolidation of the GP universe to increased private wealth participation, that may reshape the institutional investor experience. For South Korean LPs, there are many questions and few easy allocation decisions. 

• What are the key factors influencing portfolio construction?
• To what extent are LPs using secondaries as a rebalancing tool?
• Are investors declining re-ups and pursuing new GP relationships?
• Do LPs want more exposure to Asia and how would they get it?