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How did Search Panda come to be, and what inspired its creation? What is its mission within the context of the ETA community?
The creation of Search Panda was driven by a desire to change the status quo, which resonates with many entrepreneurs. Before starting Search Panda, I worked at a large investment firm, where I observed firsthand the dynamics of investment business growth and decline. This experience led me to seek a new perspective on finance, one that would incorporate an entrepreneurial and impactful angle. While studying at Yale School of Management, I came across the concept of ETA (Entrepreneurship Through Acquisition), and my interest in it grew, eventually leading me to immerse myself in this field.
The mission of Search Panda™ as an entrepreneurial acquisitions community is threefold:
- To support and promote the long-term development of small and medium-sized enterprises (SMEs), which are vital to any economy;
- To discover and nurture the next generation of entrepreneurs who will lead these businesses;
- To introduce search funds as an asset class of impact investing in response to the growing demand for alternative asset management strategies in Asia-Pacific.
More specifically, Search Panda focuses on building communities, translating literature, organizing conferences, and introducing the concept of ETA to a broader audience. We aim to help investors understand and invest in entrepreneurial acquisitions, inspire entrepreneurs to embark on their own acquisition journeys, and provide business owners with new exit strategies, thereby creating long-term value for businesses and talent. On a global scale, we are working to expand the search fund model in the Asia-Pacific region, establishing regional hubs that connect this market to the global search fund community, enabling more efficient academic research, business exchanges, and investment empowerment.
Recently, you played a key role in organizing the CEIBS-IESE China (APAC) Search Fund Conference. Could you share the motivation behind this initiative and its core objectives?
Search Panda played a pivotal role in facilitating the collaboration between CEIBS and IESE on search funds in China and the Asia-Pacific region. This partnership culminated in the inaugural CEIBS-IESE APAC Search Fund Conference, which we played as the primary event organizer. Our responsibilities included helping the co-hosts to design the content, invite speakers, secure sponsorships, promote the event, manage logistics, and oversee post-event engagement.
The driving force behind this initiative was to bring together key players in the search fund ecosystem—ecosystem-investors, entrepreneurs, academics, business owners, and service providers—to foster knowledge exchange, build networks, and promote the search fund model. Through this conference, we hoped to expand the reach of search funds in the APAC region and provide valuable insights into how this model can be applied to address the succession needs of family-owned businesses, a significant challenge in many markets, among many other suitable social problems.
What were some standout moments or discussions from the conference that you believe had the most significant impact on the SF community?
The conference’s primary focus was on delivering value to all participants. As the first search fund conference for the APAC region, we attracted attendees from across Greater China, as well as from countries like Japan, Korea, Singapore, and Indonesia. The sessions, particularly those centered around real life examples, were instrumental in deepening attendees’ understanding of the search fund model.
Several moments stood out, such as the speeches from Professor Jan and Marc, which provided valuable insights into their personal experiences with search funds. We also had entrepreneurs from the APAC region share their journeys, highlighting the unique challenges and opportunities of building businesses through acquisition in this region. The conference allowed for a lively exchange of ideas between investors, who discussed emerging trends and the opportunities they see in APAC markets.
In addition, the panel on the Chinese market offered a fresh perspective on the country’s economic environment, which has been subject to polarized views due to geopolitical tensions. Experts offered their opinions on topics like tax exemptions for overseas capital investment and the willingness of M&A banks/lenders to embrace the search fund model. This kind of knowledge exchange will help bridge gaps, eliminate misunderstandings, and encourage further investment in the region.
The conference highlighted the vast potential of SFs in China and the Asia-Pacific region. What unique opportunities do you see for SFs in this part of the world? How large is the market in terms of SMEs and succession needs?
The search fund market in APAC, especially in East Asia, is promising, driven largely by the pressing need for succession planning among family-owned SMEs. In China alone, there are 57 million SMEs. In addition, if we count associated entities as one, around 3 million family-owned businesses are facing the challenge of succession. If one-third of these businesses manage to transition successfully, that still leaves roughly 2 million family-owned companies that could serve as targets for search funds. This figure doesn’t even account for non-family-owned SMEs, which broadens the market further.
Beyond China, countries like Japan are also experiencing significant demand for business succession, with several platforms dedicated to facilitating SME transactions already going public. The market for search funds is set to grow rapidly as more investors and entrepreneurs recognize the potential of this model for addressing succession challenges and creating long-term value.
Since SFs are new to China, what challenges do entrepreneurs and investors face in adopting this model? How might local cultural and regulatory nuances in APAC influence the success of SFs compared to more mature markets like North America?
As with any emerging model, one of the primary challenges is overcoming skepticism from both potential investors and business owners of potential target companies. Investors often take time to understand the search fund model and the long-term value it offers, while many business owners may not initially trust inexperienced outsiders to take over and manage their businesses.
The regulatory and cultural landscape in APAC is another factor that can influence the success of search funds. The differences in business practices, family dynamics in business, and regulatory hurdles can make it harder to apply the model in the same way it is done in North America. For example, the tax and M&A structures in China and other APAC markets may require additional effort in terms of due diligence and deal structuring. However, as more search fund deals are completed in the region, it will become easier to navigate these complexities.
Looking ahead, where do you see the SF ecosystem in APAC in the next 5–10 years?
In the next 5-10 years, we anticipate the search fund ecosystem in APAC to become much more active and dynamic. We expect to see a greater number of successful entrepreneurial acquisitions, backed by more data-driven research, and an increasing number of participants from diverse sectors. As local markets mature and the regulatory environment becomes more conducive to these types of transactions, the search fund model and various ETA models will continue to gain traction.
We also foresee stronger regional collaborations with the international search fund community, with more business schools offering specialized courses and events related to entrepreneurial acquisitions. In turn, governments across APAC will likely take a greater interest in fostering the growth of SMEs and providing the regulatory support needed to ensure the long-term success of this model.
