The Takeaway: A Q&A With Angela Hu on the Resurgence of Asian Financial Sponsors and the Rise of Strategic ‘Buy and Build’

Following a lull in private equity dealmaking, what is the current sentiment among Asian financial sponsors as we move through 2026?

Following the 2021 peak, the market endured a prolonged deployment and fundraising hangover. However, sentiment definitively shifted in late 2024. We have moved past portfolio triage; the “green shoots” observed in 2025 have now matured into robust, real-world deal activity in 2026, with sponsors actively deploying capital again. We have recently advised on highly strategic, global mandates with a strong Asian angle, such as the sale of a premium Scandinavian chocolate brand to IDG Capital and the sale of a North American dental waste leader to AGIC Capital.

Deal velocity in 2026 remains robust, driven by sponsors seeking international revenue streams and resilient assets.

You’ve identified “buy and build” as a dominant theme. Why is this strategy gaining so much traction now?

In a market where organic growth can be volatile, “buy and build” is the preferred architecture for value creation. At its core, the strategy involves acquiring a robust, foundational platform business in a fragmented sector and systematically scaling it through a series of smaller, complementary bolt-on acquisitions.

By pivoting away from riskier, high-multiple stand-alone targets, sponsors are using this approach as a highly effective de-risking mechanism. It rapidly broadens geographic footprints, deepens product suites, and drives operational synergies, ultimately delivering significant multiple arbitrage at exit. Sponsors actively seek advisors capable of sourcing these needle-moving bolt-ons, and it remains a core driver of our current M&A pipeline.

As global fundraising dynamics evolve, how is the LP landscape recalibrating its exposure to the Asia-Pacific (APAC) region?

We are witnessing a fundamental restructuring of the LP capital base. As some North American allocators maintain a more cautious posture, Middle Eastern sovereign wealth funds and asset managers have decisively filled the void with long-term capital mandates for Asia.

This is a structural shift, not opportunistic tourism. The depth of their commitment is reflected in rapid team expansions and the recruitment of senior talent to lead regional offices, cementing the Middle East as an integral, permanent driver of the APAC dealmaking ecosystem.

Beyond traditional M&A, what niche opportunities are you seeing for long-term capital like family offices and sovereign wealth funds?

We are seeing intense interest in tax receivable agreements (TRAs)—monetized future cash flows from U.S. IPO assets—often sold by financial sponsors. For sophisticated pools of long-term capital, TRAs can offer a highly compelling risk-adjusted profile: mid-teens returns, highly predictable cash flows, and low maintenance relative to traditional private equity. We recently brought an Asian sovereign wealth fund in as an anchor investor on a major TRA transaction.

Similarly, bespoke, single-asset direct investments, structured by our specialist Private Capital Advisory teams in Europe and the U.S., are proving highly attractive to Asian family offices seeking concentrated, high-conviction exposure.

What is another major trend on your radar for the coming year?

Corporate carve-outs in China. Multinational corporations are actively divesting their China-based operations, driven by a confluence of geopolitical risk mitigation, the need for localized market agility, and broader portfolio rationalization. We are currently advising a major global chemicals group on exactly this type of divestiture. Because these carved-out businesses are often structurally sound, high-quality assets, they are generating intense bidding competition from both Asian strategic acquirers and regional GPs.

So, what’s The Takeaway?

For Asian financial sponsors, deal velocity is accelerating through cross-border M&A and corporate carve-outs, with strategic ‘buy and build’ remaining the ultimate de-risking mechanism. The structural influx of Middle Eastern LPs, alongside alternative funding pathways such as TRAs and single-asset direct investments, is fundamentally redefining how regional dealmaking is funded.