Singapore fund managers pivot to healthcare, education, and tech

The shift reflects resilience in a market where volatility has become the norm.

Fund managers in Singapore are redirecting capital toward healthcare, education, and technology as private equity adapts to economic uncertainty, slower exits, and shifting demand across Southeast Asia.

The pivot reflects resilience in a market where volatility has become the norm, Bhavik Vashi, managing director for the Asia-Pacific and Middle East and North Africa at Carta, Inc., told Singapore Business Review.

“We’re seeing managers pivot decisively toward sectors such as healthcare that can weather economic volatility whilst delivering scalable growth,” he said in an emailed reply to questions. Healthcare, he added, provides flexibility for both buyouts and growth equity deals, making it especially appealing.

Healthcare has emerged as one of the most active private equity sectors this year. Singapore-based Quadria Capital closed its third healthcare-focused fund in May at $1.38b, (US$1.07b) whilst in August, a Temasek Holdings (Pte) Ltd.-backed firm acquired a 16% minority stake in AC Health, the healthcare arm of Ayala Corp. in the Philippines.

Healthcare accounted for 27% of Southeast Asia’s $1.29b (US$1b) deal value in the second quarter, said Luke Pais, EY-Parthenon Asean private equity leader, noting that demand underpins the activity.

“Healthcare has been very active,” he said via Zoom. “The driver for that is the public wants quality healthcare and people are willing to pay for it.” He added that universal healthcare schemes in several countries have lifted sector prospects.

Andrew Thompson, head of asset management and private equity at KPMG International Ltd., cited the role of demographics.

Most investment themes today are tied to the growth of the region’s middle class, he said, citing the structural demand for healthcare and education as incomes rise.

Education is gaining traction alongside healthcare, particularly in areas tied to workforce upskilling and lifelong learning. Vashi said both policy support and corporate demand are helping the sector become an investment hotspot.

“From an investment standpoint, education has proven relatively resilient during economic downturns, as both companies and individuals continue to prioritise skill development to stay competitive,” he added.

Prime Minister Lawrence Wong’s National Day Rally 2025 speech reinforced the trend, pledging support for artificial intelligence (AI) workforce training and small and medium enterprise adoption of digital technologies.

Recent deals underscore this momentum. In May, XCL Education Holdings raised $516m (US400m), in a private credit facility from Apollo Global Management, Inc., Partners Group Holding AG, Deutsche Bank AG, and Nomura Holdings, Inc. By August, Keppel Ltd. had announced $6.3b in private funds, with part allocated to education assets and data centres.

Technology investments, particularly in AI and data centres, are accelerating. Vashi said adoption of AI and cloud computing is fuelling stable yields and long-term growth for infrastructure such as data centres.

Justin Tan, a partner and head of Asia-Pacific financial services at L.E.K Consulting, expects Southeast Asia’s data centre capacity to triple to 5.2 to 6.5 gigawatts by 2030, spurred by a tenfold increase in AI computing demand. The broader technology sector is also benefiting: software as a service, fintech, and enterprise tech are drawing private equity flows.

“AI-driven innovation is no longer viewed as a ‘nice to have’ but as core to the business model, with value creation tied to how effectively companies integrate and scale technology,” Vashi said. He noted that early-stage AI startups are already securing higher valuations with less dilution, signalling investor confidence that could influence later-stage deals.

Singapore’s startup ecosystem remains strong. Neha Singh, chairperson and managing director of Tracxn Technologies, said private equity firms invested $876m (US$680m) in Singapore’s tech startups in the first half.

Fintech led the activity at $618m (US$480m), followed by enterprise applications at $451m (US$350m), and retail at $386m (US$300m). “The government aims to foster research and partnerships to scale these sectors further, providing a conducive environment for private equity investments,” she said in an emailed reply to questions.

Fund managers are also deploying strategies to improve flexibility. Vashi said secondary transactions and continuation funds, once niche, are now mainstream. These let managers provide liquidity to investors whilst extending the life of assets.

Pais said exits remain sluggish in Southeast Asia. “The exit pipeline is clogged at the moment, and that has affected fundraising,” he said. “As exits unlock, fundraising will unlock as well, and the cycle will return to normal.”

Secondary deals, where one private equity firm buys from another, are bridging gaps, whilst continuation funds give managers more time with existing assets.

Private credit is another growing strategy. Vashi said its rise reflects Southeast Asia’s maturing private equity ecosystem, offering managers and portfolio companies alternatives to traditional financing.

Fund managers remain cautiously optimistic about Singapore and Southeast Asia’s private equity landscape. Vashi and Singh said stabilising interest rates and improving public markets would support deal activity in the next six to 12 months. They expect the

Singapore Exchange’s push to revitalise listings to further attract quality issuers.

Thompson predicted a pickup in deal flow and exits, noting that Southeast Asia is well positioned relative to China, with lighter tariff exposure and competitive costs. Tan said growth would be concentrated in "selected themes."