According to www.businesstimes.com.sg, MSCI’s global survey of 130 general partners (GPs) found that 67% now rank distribution to paid-in capital (DPI) as their top strategic proxy — surpassing all other performance metrics except internal rate of return.
DPI Surges as LPs Demand Tangible Returns
Limited partners (LPs) are increasingly insisting on concrete, cash-based evidence of value creation, shifting focus from theoretical returns to actual capital returned. While internal rate of return (IRR) remains the most widely tracked metric, 38% of respondents identified DPI as drawing the most investor attention after IRR. This reflects mounting pressure amid muted distributions: in 2025, global DPI levels reached just 13% — less than half the pace seen during the peak distribution years of 2017–2018. As a result, GPs are actively pursuing liquidity solutions to meet LP expectations, with Asia-Pacific firms leading the shift toward fund recapitalisation over secondary market exits.
Asia-Pacific Divergence and Liquidity Strategy
Asian GPs are diverging markedly from their North American and European peers in liquidity strategy. Rather than relying on secondary transactions, they are pursuing fund recapitalisation at significantly higher rates — a trend MSCI attributes to structural constraints including cross-border capital restrictions and regulatory volatility. This regional distinction underscores how local market infrastructure shapes operational responses. For example, Ben Wyburd, head of APAC private assets products at MSCI, noted that “the gap between awareness and readiness leaves firms exposed to risks already on their horizon, pointing to the need for connected infrastructure built on integrated and reliable data systems to navigate a world of compounding risks and evolving LP expectations.”
Tech Capability Gaps Widen Across Firm Sizes
Technology adoption remains uneven across the private equity landscape. 48% of all GPs surveyed cited advanced data, technology, and artificial intelligence capabilities as their biggest operational gap. That figure rises to 63% among mid-size firms and 54% among large firms — indicating that scalability intensifies tech limitations. While 84% have moved beyond AI exploration into targeted pilots (35%), operational integration (25%), or strategic decision support (18%), foundational infrastructure lags: only 12% report fully centralised data flow. The majority — 42% — operate on partially connected systems; another 32% rely on standardised but manual platforms, and 13% still use siloed systems.
Risk Preparedness Gap Widens in Asia
Geopolitical and macroeconomic risk dominates GP concerns globally — but the preparedness deficit is most acute in Asia. 72% of Asian GPs ranked macro/financial risk as their highest concern, compared to 61% in North America and 40% in Europe. Yet their self-assessed readiness trails concern by −14 percentage points. Regulatory and legal risk follows closely, cited by 66% of Asian GPs, with an even wider preparedness gap of −17 percentage points. MSCI links these gaps to structural pressures including cross-border capital flows, regulatory unpredictability, and geopolitical proximity — factors that directly impact portfolio monitoring, compliance reporting, and exit planning.
Source: businesstimes.com.sg
Compiled from international media by the SCI.AI editorial team.
