Fund Finance in Asia: Unlocking Strategic Value in a Transforming Market

Fund finance in Asia is no longer a future trend - it’s happening now and it's a strategic imperative. As private capital markets across the Asia-Pacific region mature, fund finance is becoming a critical enabler of capital efficiency, portfolio agility, and competitive differentiation.

In a recent dialogue between Soumitro Mukerji (Partner, DLA Piper) and Freshta Mayar (Managing Director, Neu Capital), the conversation went beyond technical insights - it was a reconnection of two industry pioneers who began their careers in London’s financial sector 15 years ago. Now, they are helping shape the future of fund finance across APAC, bringing global experience to regional transformation.

Asia’s Fund Finance Market: From Fragmentation to Opportunity

The Asia-Pacific fund finance market is diverse and rapidly evolving. While global adoption of fund finance has surged - rising from 10% in 2000 to 90% in 2023 - Asia still represents just over 10% of the global market. This gap signals immense untapped potential.

Key Insight:
Japan, in particular, is emerging as a standout performer, with participants from the recent 2^nd Annual Tokyo Fund Finance Association Conference marked the increase investor appetite for the Japanese market. Amid global volatility and de-dollarisation trends, international capital is increasingly viewing Japan as a stable, governance-driven, and investor-friendly destination. This is driving a surge in private capital deployment - and with it, demand for fund finance.

Legal and Structural Innovation: Catalysts for Growth

Historically, Japan’s fund finance market has been constrained by structural and legal limitations - such as fund documents prohibiting borrowing and collateral, and limited GP familiarity with fund finance tools. However, this is changing.

What’s New:

• The Japanese Ministry of Economy, Trade and Industry (METI) has introduced a Model LPA that explicitly permits fund-level borrowing and collateralization.
• This could be a game-changer, aligning Japanese fund structures with global standards and unlocking broader adoption of subscription lines and NAV-based facilities.

Client-Centric Insights: What Fund Managers Need to Know

Fund finance is no longer just about liquidity - it’s about strategy. Today’s fund managers are leveraging:

• NAV-based lending to unlock value from portfolio assets,
• Hybrid structures to manage redemptions and capital calls,
• Tailored debt solutions to support distressed or high-growth companies.

These tools are especially critical in today’s environment of subdued valuations, challenging fundraising conditions, and volatile capital markets.

Mid-market managers in Asia face both the greatest opportunity and the steepest challenges - particularly in accessing structured finance amid market fragmentation and limited internal resources.

Regional Dynamics: A Closer Look

• Japan: A nascent but rapidly evolving market. Subline facilities are gaining traction, though NAV financing remains rare. Regulatory reforms and the Model LPA could accelerate adoption.
• India: Regulatory shifts are enabling offshore fund financing. DLA Piper recently advised on one of the first such transactions.
• Southeast Asia: High fund manager activity but limited scale. Access to structured finance remains a challenge.
• Australia, Singapore, Hong Kong: Emerging as regional hubs for sophisticated NAV and hybrid structures.

Collaboration and Education: Building Market Maturity

Education and collaboration are essential to unlocking Asia’s fund finance potential. Initiatives like the Fund Finance Association (FFA) and FFA University are playing a pivotal role in:

• Introducing global best practices,
• Supporting the next generation of fund finance professionals,
• Fostering a more connected and informed ecosystem.

Conference Momentum:
Attendance at the Tokyo FFA conference more than doubled from 2024 to 2025, signaling growing engagement and interest across the region.

Looking Ahead: Strategic Financing as a Growth Lever

As Asia’s private capital ecosystem matures, fund finance will be a key differentiator for fund managers seeking to scale, compete, and deliver value. Legal innovation, regulatory reform, and cross-border collaboration will be central to this journey.