Aquilius Investment Partners is making a bold move to dominate the Asian private equity secondaries market, and it’s doing so by poaching top talent and setting up shop in Hong Kong. But here’s where it gets controversial: can a firm that’s only been around since 2021 truly reshape a market as complex and competitive as Asia’s? Let’s dive in.
With the appointment of Martin Yung, a former heavyweight from HarbourVest Partners, Aquilius is signaling its intent to scale up its presence in Asia’s private equity secondaries space. Yung, now a managing director and head of private equity secondaries at Aquilius, brings over a decade of experience to the table. His goal? To deploy significantly more than USD 500 million annually in the medium term. And this is the part most people miss: Aquilius isn’t just dipping its toes in the water—it’s already invested several hundred million dollars across GP-led and LP-led transactions since its inception.
Based in Aquilius’s newly opened Hong Kong office, Yung will work alongside Patrick Qian, another HarbourVest alum who’s joined as a principal. This expansion isn’t just about geography; it’s about tapping into North Asia’s capital sources, accessing more deal flow, and leveraging a deeper talent pool. Founding partner Christian Keiber sees this as a logical next step for a firm aiming to navigate Asia’s geographically dispersed and relationship-driven market.
Aquilius has already made waves in real estate secondaries, deploying over USD 500 million annually in a market it essentially had to create from scratch. But here’s the kicker: Keiber believes the private equity secondaries market is many times larger, and Aquilius is positioning itself to capitalize on this long-term potential. The firm closed its debut fund in 2023 with USD 400 million in commitments and raised an additional USD 200 million for co-investments. Its Fund II recently closed at USD 750 million, surpassing its USD 700 million target. With USD 1.1 billion in assets under management, including separately managed accounts (SMAs), Aquilius is no small player.
While its AIP Secondary Fund II focuses solely on real estate and is already 50% deployed across eight transactions, Aquilius isn’t ruling out a dedicated private equity secondaries fund. For now, it’s leveraging existing capital pools via SMAs to pursue private equity opportunities. The firm’s LP base is predominantly institutional, including sovereign wealth funds, pension funds, financial institutions, and family offices, with strong representation from Asia and the Middle East.
Here’s where opinions might diverge: Aquilius targets a middle market it believes is underpenetrated by global secondaries investors, who often struggle to secure investment committee support for Asian opportunities. Keiber argues that global firms, focused on economies of scale in their home markets, leave substantial ‘white space’ for a dedicated player like Aquilius. But is this enough to give Aquilius a competitive edge? Or will global players eventually catch up?
In private equity, Aquilius aims for a balanced portfolio between GP-led and LP-led transactions, as well as between developed and emerging markets. While there’s appetite for China exposure, the firm prioritizes a clear path to liquidity, with deal sizes ranging from USD 25 million to USD 150 million. On the LP-led side, Aquilius has observed increased selling activity of Asian fund positions by non-regional groups, as investors seek to redeploy capital closer to home during uncertain times.
The GP-led market, meanwhile, is evolving as participants become more familiar with secondaries. However, Yung notes that the reality of discounts is more nuanced than often portrayed. Here’s a thought-provoking question: Are discounts in GP-led transactions a true reflection of market conditions, or are they a byproduct of underwriting assumptions? Yung argues the latter, emphasizing that discounts reflect a mix of factors, including portfolio quality, GP track record, and liquidity prospects.
Aquilius’s rapid growth—from a two-person team to 30 investment professionals managing USD 2 billion in assets—is impressive. But as it expands into Hong Kong, the firm faces the challenge of maintaining its local expertise while scaling up. What do you think? Can Aquilius sustain its momentum, or will the complexities of the Asian market slow it down? Let us know in the comments!
