Asia-Pacific: The ETA Frontier
The IESE 2024 International Search Fund Study covers 40 countries, with Asia-Pacific representing approximately 11% of international search fund activity by acquisitions completed since 2020. The region is genuinely a frontier — earlier stage than Latin America or Europe, with less established infrastructure but in some cases more compelling structural tailwinds.
The heterogeneity of Asia-Pacific means "Asian ETA" is not a useful category. Australia, Singapore, Japan, and India are four fundamentally different markets with different legal systems, languages, cultures, financing environments, and succession dynamics.
Australia: The Most Developed Asia-Pacific ETA Market
Australia has the most mature ETA infrastructure in Asia-Pacific. The country operates under English common law, has a developed M&A advisory ecosystem, English-language deal flow, and a business owner demographic with a meaningful aging cohort seeking succession solutions. The Australian Bureau of Statistics estimates approximately 38% of SME owners are over 60 — creating a structural succession dynamic comparable to the US.
The primary advantages: established legal infrastructure for acquisitions, a functioning banking system familiar with leveraged acquisition finance (though without a direct SBA equivalent), and growing familiarity among Australian business advisors with the ETA model. Sydney and Melbourne have developing communities of search fund practitioners.
The primary challenges: geographic isolation limits the investor pool significantly. Most US-based search fund investors have never evaluated Australian deals. The absence of US-style acquisition financing means equity contributions are larger. And Australian acquisition multiples have risen meaningfully in recent years, compressing the entry pricing advantage that makes ETA economics attractive.
Singapore: The ASEAN Deal Hub
Singapore functions as the financial and legal hub for Southeast Asian M&A. Its English-language legal system, stable regulatory environment, and sophisticated financial services infrastructure make it the natural base for searchers targeting ASEAN businesses — whether in Singapore itself or in nearby markets (Malaysia, Vietnam, Indonesia, Thailand).
The challenge is acquisition target size: Singapore's domestic small business market is limited by the country's physical size. Most Singapore-based searchers are evaluating cross-border targets in the broader ASEAN region, which introduces complexity: different legal systems per country, currency risk, language barriers, and regulatory environments that require local expertise.
Searchers based in Singapore with deep regional networks and local language capability in a specific ASEAN market (Vietnamese, Bahasa, Thai) have a genuine sourcing advantage. For investors, Singapore deals are more complex to underwrite than US or UK deals — but the market immaturity means less competition for quality targets.
Japan: The World's Largest Unaddressed Succession Crisis
Japan represents the most structurally compelling ETA market in the world that remains largely untapped. The Japan Small and Medium Enterprise Agency estimates that approximately 66% of SME owners are over 60, and the country faces a generational succession crisis unlike anywhere else: an estimated 600,000 Japanese businesses close each year due to lack of successors — despite being profitable and viable. These are not failing businesses. They are businesses with no one to take them over.
The reasons ETA has not flooded into Japan are entirely structural: language barrier (virtually all deal flow is in Japanese), cultural norms around business ownership and outside buyers, a legal system that functions very differently from common law systems, and deep reluctance among many Japanese sellers to take on outside investors.
Searchers who are Japanese-fluent and culturally embedded have access to an extraordinary supply of acquisition targets at valuations that remain well below US equivalents. The challenge is financing and investors — Japan's banking system for SME acquisitions is different from US structures, and international investors have limited Japan expertise.
India: Early Stage, High Potential
India has a rapidly growing ETA community, driven by the large number of Indians who have studied at US and European MBA programs and returned to India with search fund knowledge. The structural opportunity is enormous: India has hundreds of millions of SMEs, a significant aging owner cohort in established businesses, and a growing economy with increasing business formalization.
The execution environment remains challenging: India's regulatory environment for acquisitions requires careful navigation, deal timelines are longer, and the financial infrastructure for acquisition financing is different from Western markets. But the market is developing quickly, and searchers with strong regional networks and regulatory expertise are finding quality targets.
What Asia-Pacific Deals Need from Investors
Asia-Pacific deals require investors who are genuinely comfortable with geographic and regulatory complexity, longer timelines, larger equity contributions (typically 30–40% given limited acquisition financing options), and currency risk in non-USD markets. The upside — lower entry multiples, less competition, structural succession tailwinds — is real, but it requires patience and sophistication.
Mayfaire Row evaluates Asia-Pacific deals case by case. We are most interested in Australia (common law, English-language, functioning infrastructure) and Singapore-based deals targeting specific ASEAN markets where the operator has deep local expertise.
*Sources: IESE Business School, "2024 International Search Fund Study"; Japan Small and Medium Enterprise Agency, "2023 White Paper on Small and Medium Enterprises"; OECD, "SME and Entrepreneurship Outlook 2023"; Australian Bureau of Statistics.*