Investors in Southeast Asia and Australia face dramatically lower cash returns compared to their US peers, with median DPI still below 0.3x even after a decade. Secondaries create immediate pathways to distributions, solving liquidity problems for LPs and enabling the recycling of capital into new opportunities.
Despite more than US$40bn in venture capital raised across Southeast Asia and Australia since 2015, liquidity has not kept pace. According to Preqin, less than 20% of Asia-Pacific VC funds vintage 2015–2018 have returned even half of contributed capital, compared to over 45% of equivalent US vintage funds. Cambridge Associates estimates median DPI for APAC venture remains below 0.3x, meaning the majority of LPs are still waiting for meaningful cash distributions nearly a decade into the cycle. COVID further compounded the issue – portfolio company scaling horizons were pushed out by 24–36 months, follow-on rounds became more dilutive, and exit markets (including ASX and SGX) remained sporadic at best. The result: extended fund lives, delayed carry crystallisation, and mounting LP pressure for realised outcomes.
For Southeast Asia and Australia, the timing is arguably even more compelling. The region is asset-rich but liquidity-poor – full of paper unicorns but light on cash returns. Yet the need is acute: first-generation VC firms are approaching their Fund III or Fund IV cycles, and LPs increasingly require hard DPI evidence to re-up. Secondaries offer a constructive, market-tested mechanism to reconcile long-duration company building with near-term cash flow expectations. Far from signalling weakness, they represent the maturation of venture as an asset class in the region, embracing structured liquidity as a feature, not a flaw.
US and European investors have already embraced secondaries as an essential portfolio management tool, not just a defensive liquidity tactic. Over 70% of top-tier venture funds now use continuation vehicles or structured secondary solutions as standard, significantly increasing realized distributions and flexibility. Southeast Asia and Australia will be the next frontier for intrepid venture secondaries managers.