The Benefits of Investing in Asia Pacific

Firms venture abroad in order to increase customer base and profit, develop brand identity in different countries, and diversify. The business climate evolves and many companies reconsider their market penetration plan.

As an APAC is low risk/high return area, the opportunity to have localised fund structure from a private equity group is a growing possibility.

Diversification

Most high-profile investment analysts are more than willing to say that diversification is an important component of achieving long-term financial objectives with reduced risk. Diversifying is an exercise of dividing your portfolio across different asset classes, geographic regions, time horizons and companies in order to minimize the risk that a poor investment or portion of a market would consume the rest of your portfolio.

Diversification is no shield against losses, rather, being too invested in a single asset class or market area may result in losing the opportunity to cash in on high yields that would otherwise have come your way.

In a growing alternatives market in Asia, sector long/short funds are also being added as a new diversification strategy for public equity portfolios to further benefit investors. These may also be less expensive than investing in an Asia-Pacific long-only fund and better matched to the investor’s end goals, thus when you allocate to Asian markets it should be in accordance with goals and time frames. This could be particularly important to understand the major return drivers in Asia.

Lower Risk

Asia’s markets are also highly volatile and present investors with more extensive investment periods with opportunities to benefit from inefficiencies that they can take advantage of. Investment in APAC can be achieved with a comprehensive risk management strategy, incorporating knowledge of regional regulation and coping strategies to adjust to regulatory shifts.

MNCs can capitalize on business strengths in a specific region by picking markets by province/state. Market prioritization can improve business efficiency by streamlining the supply chain and efficiently using available resources. For instance, in an ASEAN region with increasing consumption capacity and power, a B2C company should consider Tier 1 markets like West Malaysia or Java as they are more consumer-friendly and more productive and might be supportive of local go-to-market operations. Moreover, Tier 2 countries like Thailand and the Philippines have affordable living prices that help B2C businesses become more competitive.

Higher Returns

As Asian markets expand at a faster pace and with less volatility than the rest of the world, it is a potential opportunity for investors to limit duration risk and potentially increase yield through a global investment grade (IG) portfolio.

Asia with its 4.5 billion population is an immense growth opportunity and the hub of much global corporate profit. In addition, business conditions in the entire region are getting better and foreign firms are still coming looking to grow in Asia.

With regional market fragmentation and small business specifics, it’s difficult for MNC executives to identify local investments effectively. A province/state priority structure helps companies optimise their local go-to-market strategy according to their strategic objectives; Frontier Strategy Group’s priority structure can help private equity (PE) companies identify hot subnational markets by examining the operating environment and risk adjusted opportunity that yields individualized transaction outcomes and superior GP/LP relationships.

Accessibility

Southeast Asia also has an increasing middle class with a rising disposable income that gives business access to more customers and the regional governments who have uncomplicated the bureaucracy and reduced red tape to help grow businesses.

The accessibility is the number one priority for all multinational enterprises not just as a means of bringing their product to diverse audiences but also for regulatory compliance and usability. Prioritizing accessibility contributes to brand credibility, customer satisfaction and revenue.

Web accessibility in APAC has become an ever more significant issue as most states now provide legislation and regulations for enabling access to public places and digital content for the blind, especially in developing countries such as India. Therefore, organisations need to implement accessibility testing tools such as Deque’s axe ADA Mobile in order to successfully test and correct mobile applications for both the HTML web and native mobile platforms.