IPO Newsletter Issue 1/2023

As we just move to this new year 2023, we also reflect on the last year that was. Last year presented many new challenges to the ever-changing business landscape, from the Russia-Ukraine crisis, broadening inflationary pressures, and rising costs to supply chain delays. These have tested the ability of businesses to respond quickly, innovate and adapt in the face of fast-moving change while unearthing new trends that are likely to stay with us in the long run.

In this issue, we explore some of today's emerging themes in the business landscape. The pandemic highlighted the growing importance of FinTech, not as a threat, but as a source for viable partnerships among financial institutions, with corporate venture capital acting as the key enabler.

We have also seen changes in consumer behavior from lockdowns, social distancing, and health and safety concerns. Consumer companies wishing to capitalize on these trends will need to understand the underlying dynamics in consumer behavior and how they will continue to evolve.

Private debt is on the rise globally, gaining popularity across Asia with increased attention to the use of private debt to fuel corporate and economic growth. There is potential for Thailand to build out a multi-billion-dollar private debt market that could help fill the financing needs of local under-banked and/or under-served micro, small and medium enterprises and larger corporates.

We hope you will find this newsletter an insightful read, and we look forward to connecting and discussing some of these issues in greater detail with you. In the meantime, please reach out to us should you have any questions.

Featured highlights

Corporate venture capital for financial institutions Unlocking the value of CVC investment

Corporate venture capital (CVC) is becoming increasingly important for many financial institutions (FIs), creating opportunities to drive financial growth, participate in new market collaborations, and use innovative technologies as a competitive advantage.

Corporate venture capital for financial institutions

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The Thailand Consumer Survey: Understanding multiplicities in consumer behaviour

As Thailand's economy recovers, it is clear that consumer companies seeking to capitalize on new evolving consumer trends will need to understand not only the dynamics of the multiplicities in consumer behavior, but also how they are likely to converge with one another in the days to come.

The Thailand Consumer Survey: Understanding multiplicities in consumer behaviour

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Thailand private debt feasibility study: Opportunities for the Thai capital market

There is potential to build out a multi-billion dollar private debt market in Thailand, given key challenges are addressed.

Private debt, defined as debt financed by non-banks in private markets, has been gaining popularity around the world. Borrowers enjoy the bespoke nature of the asset class, as they are able to build close relationships with lenders, obtain flexible payment terms and longer time horizons, and receive faster capital deployments. Meanwhile, investors enjoy portfolio diversification (both geographically and by asset class), higher risk-adjusted returns in exchange for liquidity lockup (known as the "illiquidity premium"), and more predictability in returns compared with many public market investments. But despite the global trend, private debt is still nascent in Thailand.

Thailand private debt feasibility study: Opportunities for the Thai capital market

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CVCs: Building an effective corporate venture capital strategy

To be successful as the venture marketplace evolves, financial institutions need to address the following four questions:

The potential for private debt in Thailand: Investor perspective

Thai investors are beginning to notice the rise of private debt opportunities abroad and becoming interested in this asset class for 3 key reasons:

  1. Diversify their portfolio both in terms of asset class and geography
  2. Seek higher fixed income returns in exchange for liquidity
  3. Enjoy more predictable, less volatile returns compared with public market investments

“On the investor side, institutional and high net worth individuals are looking to diversify their portfolio, seek higher returns, and increase their investment sophistication.“

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