Hi Reader,
As we are in the early innings of 2026, it feels like a good moment to reflect on what 2025 clarified about Southeast Asia and why the region has started to matter more in serious capital allocation conversations.
Southeast Asia has been building scale, trade relevance, and institutional capability for decades, while global investors have been slow to update their allocation and valuation frameworks accordingly. That gap has now grown large enough to stop being an abstract macro observation and instead become a compelling and practical reason to act.
Endurance Capital’s evolution during 2025 sits inside that broader shift. 2025 marked a deliberate expansion of geographic scope, while not changing anything in our core approach.
For most of the past decade, we focused our work in Vietnam.
We built our edge through time in the market, local relationships, repetition, and a willingness to engage where outcomes depended on governance, incentives, and execution, rather than narratives that looked neat on paper.
During 2025, we decided to expand from Vietnam to Southeast Asia because the type of long-term activist opportunities we have pursued in Vietnam also exist across the region, and our process is already established to capture them. Expanding across the region also allows us to leverage the fact that particular national markets in the region have a tendency to fall in and out of favor.
With this backdrop, we don’t want to be forced to allocate our own and our investors' capital into one single country if the relative valuation-to-potential is more compelling in a neighboring Southeast Asian country/company.
Instead, we want to be able to better allocate and optimize for the relative long-term undervaluations of certain countries and companies at any one point in time in the region. 5-10 years back, Vietnam was out of favor, and Indonesia was the outstanding investor darling in the region. Today, the tables have turned 180 degrees, and the long-term Southeast Asian investment opportunity set reflects this accordingly.
This is the reason we are now launching our third collaborative activist fund in the region: Endurance Capital III - Southeast Asia.
Endurance Capital III invests according to the same C-L-A (Concentrated / Long-term / Active ownership) investment framework that has guided our work from the start - focusing on a small number of undervalued, high-quality companies, holding them for a long time, and engaging selectively and constructively as active owners to improve outcomes.
2025 was the point when the regional opportunity, the lag in global frameworks, and our readiness to execute beyond a single market aligned clearly enough to justify this step that we have been preparing for for many years.
Southeast Asia moved from optional to central
Southeast Asia is no longer an early-stage region, but at the same time, it has not yet reached the point where capital markets fully reflect what has already been built and achieved on the ground.
Economic scale, trade relevance, and institutional capacity have advanced faster than public-market valuations and governance frameworks, leaving a gap that engaged long-term investors can exploit.
Southeast Asia is home to ~700 million people. That scale places Southeast Asia among the world’s largest regional blocs by population, with a GDP around USD 4 trillion in 2025.
The absolute levels here are starting to matter because they indicate that the region has achieved a scale meaningful enough to be broadly "investable" by global institutional capital. At that point, increasingly sophisticated production networks, stronger pools of management talent, and deepened domestic demand naturally follow.
Regional growth and resilience
Southeast Asia’s top six economies are projected to grow at >5% annually over the coming decade. This trajectory is approximately ~70% faster than the global average of 3%. The core population hubs of Southeast Asia (Vietnam, the Philippines, and Indonesia) are leading this expansion with growth rates closer to 6-7% (in the case of Vietnam, the government is targeting and currently delivering >8%). The region has demonstrated significant durability by maintaining annual growth above 5% since 2000, navigating multiple global crises without losing momentum.
The structural shift in global trade
The "China-plus-one" strategy has fundamentally reorganized global supply chains. Over 85% of global firms relocating manufacturing facilities from China have moved into Southeast Asia to leverage a well-educated and cost-competitive technical talent pool, relative stability in institutions and regulations, as well as record levels of free trade agreements. While trade tensions are often viewed as a broad risk, the "Liberation Day" tariff regime accelerated the region’s distinct competitive trade advantage. Vietnam came out as the third largest beneficiary of the Liberation Day negotiations and gained an additional 6% tariff advantage over its primary competitors, while Indonesia, Singapore, Thailand, and the Philippines secured advantages between 3% and 4% in their core export sectors (all within the top 10 biggest winners globally).
These dynamics led to a major reallocation of market share. By 2025, the ASEAN-6 nations officially overtook China as the primary import hub for the United States. As of October 2025, ASEAN-6 accounted for approximately 14% of total US imports, while China's share had declined to roughly 9%. This is a tectonic shift in global trade.
Investment implications
This structural trade relevance triggers a predictable sequence of economic effects. As production ramps up, foreign direct investment (so-called FDI) flows increase, which in turn increases capital intensity and automation and therefore raises productivity per working hour. Increased productivity leads to higher wages and increased sophistication in local management talent, which in turn supercharges local consumption patterns and growth.
For long-term investors, the primary task is to establish positions before these fundamental shifts are fully priced into equity markets. Once earnings durability is no longer a matter of debate, markets re-rate.
Success in this environment requires active ownership to ensure that growth translates into consistent per-share compounding through disciplined capital allocation and improved governance. Otherwise there is a risk that inefficient capital allocation and/or governance will end up wasting the proceeds even from an underlying business that is steadily and healthily compounding.
What changed inside Endurance during 2025
Our operating background has always been regional across Southeast Asia. The Vietnam-only mandate of our first two funds reflected where we saw the cleanest listed-market opportunity set at the time, not the boundaries of our operating experience.
Long before launching a regional fund, our team built and scaled businesses across Southeast Asia, with real operating footprints of thousands of employees across all six core markets of Southeast Asia (for example, via two of the region’s largest tech exits to date: Lazada and Intrepid, but also in other regional management contexts).
We built that experience on the ground by hiring locally, building teams, establishing wide professional networks, navigating regulators, and executing inside market-specific constraints that cannot be learned from a distance.
Launching Endurance Capital III extends the investment mandate to match that regional experience base as well as the region’s diverse set of public company opportunities. A broader footprint does not change the core strategy, but it widens the set of potential opportunities and allows us to be even more selective in terms of where we invest.
In 2025, we also strengthened that capability by expanding the senior team on the ground with locals. We added Fransisca Widjaja in Jakarta and Raymond Hor in Kuala Lumpur, beefing up our coverage of Indonesia and Malaysia alongside Vietnam.
Our Jakarta and Kuala Lumpur hires are a central matter, as active ownership is practical work. It requires trusted local networks, credibility with management teams, and the ability to engage consistently over time.
Fundraising backdrop in 2025: allocators reopened the emerging market allocation debate
Early 2025 marked a change in institutional attention toward emerging markets, driven less by a new narrative and more by a shift in relative pricing and currency conditions.
Western portfolios had remained heavily concentrated in U.S. equities for much of the post-GFC period, supported by strong returns and reinforced by career risk. A meaningful reallocation required stronger incentives more than “diversification” as a principle.
Our investor conversations during the past year across Europe, Singapore, and Hong Kong during 2025 reflected that shift. Many discussions moved from first-principles debate toward implementation questions, including position sizing, structure, liquidity expectations, and governance of the investment process.
Two reference points repeatedly anchored those conversations.
First, the valuation starting point for U.S. equities became increasingly difficult to defend for long-term-oriented allocators. Depending on the methodology used, widely followed market-cap-to-GDP measures of U.S. equities have been sitting in the >200s, with some estimates even >220%.
The precise number matters less than the core message of these levels - the U.S. market has been priced for a continuation of exceptionalism and constant capital inflows, which leaves less room for any short-term “hiccup” and significantly lowers long-term expected returns (the relatively robust cycle-adjusted PE (CAPE) indicates something close to 0% or worse for US equities for the coming decade).
Second, the U.S. dollar cycle loosened. The ICE U.S. Dollar Index (DXY) traded around 98–99 at the start of 2026, after a sharp decline during 2025. Reuters noted that the 2025 move followed a long upswing in the dollar over the prior decade-plus, with the post-GFC cycle leaving the dollar up roughly 50% over the past 15 years, and the 2025 pullback landing around 7%.
Dollar strength tends to pressure emerging market earnings, raise the burden of emerging market companies’ USD liabilities, and pull capital out of emerging market stock exchanges toward U.S. capital markets (moving inwards on the perceived risk curve). A weaker dollar regime eases those pressures and supports outward capital rotation, away from the U.S. and towards emerging markets.
The combination of stretched U.S. valuations and a loosening dollar regime shifted allocator incentives. Southeast Asia benefited from that shift because the region pairs structural growth with improving institutional quality and valuation levels that remain moderate relative to long-term earnings potential.
Endurance Capital III expands into the rest of the region in that context. Reception from existing investors and new investors reflected a renewed willingness to build Southeast Asian exposure with a disciplined structure designed for long holding periods and active ownership where active engagement can improve outcomes.
First close in Q1, evergreen thereafter – matching structure to the work
Endurance Capital III is set up to reach its first close in this quarter and begin deploying capital soon after.
Our evergreen fund format with long-term capital structuring is central. Southeast Asia does not reward short holding horizons, and active ownership rarely produces full outcomes inside a single year. Governance improvements, balance sheet discipline, relistings, group structure simplification, and strategic refocusing tend to unfold over multiple reporting cycles.
A fund structure built around fixed exit dates often pushes investors and managers toward calendar- and benchmark-driven decisions, even when the underlying value creation process calls for patience.
An evergreen format reduces that pressure and establishes the right timeframe for investing. It supports measured position building, longer active engagement with management teams and boards, and capital allocation decisions grounded in intrinsic value rather than short-term price moves. It also fits the practical reality of activist work, where progress is often stepwise and linked to corporate actions, regulatory processes, or internal execution timelines.
Fundraising will continue through 2026 and beyond, which is another beauty of the evergreen structure. The objective is to align capital duration with the holding periods required to execute the C-L-A investment framework properly and to stay clear of forced selling driven by fund mechanics rather than by fundamentals.
An unexpected insight from 2025: Southeast Asia still has very little dedicated activist capital
One pattern kept surfacing in investor conversations during 2025, especially outside the region.
When I asked allocators and prospective partners to name long-term, activist-style funds focused specifically on listed Southeast Asian companies, very few could. Many could name traditional stock-picking emerging market managers, and many could name global activists operating in developed markets. Almost nobody pointed to a dedicated strategy built around collaborative active ownership across Southeast Asia’s public markets.
That observation matters for one primary reason. A shortage of dedicated activist capital usually means a shortage of consistent minority-driven shareholder engagements with listed companies - i.e., there are still a lot of untapped opportunities for this type of strategy in the region.
When activism is done well, it does not look like public theater. It looks like patient, practical, and collaborative work, for example, improving board effectiveness, tightening capital allocation, simplifying structures where complexity obscures returns, raising disclosure quality, and aligning incentives so that long-term value creation becomes the obvious choice for management and controlling shareholders.
Global precedents illustrate the path for governance evolution. Japan offers a clear reference point for how regulatory pressure and sustained engagement transform corporate behavior. During the June 2025 AGM season, shareholder proposals reached a fourth consecutive annual record, with 399 proposals submitted to 114 companies. This activity is no longer confined to capital returns.
In 2025, over 146 proposals focused on board composition and strategic management, while 53% of Nikkei 225 companies faced contested resolutions. Moreover, Tokyo Stock Exchange reforms have pushed listed companies toward cost-of-capital and stock-price-conscious management, which has raised the baseline expectations around balance-sheet efficiency and governance.
South Korea has experienced a similar acceleration. The "Corporate Value-Up Program" gained significant legal weight through the July 2025 amendments to the commercial act. This landmark reform explicitly expanded directors’ fiduciary duties to include the protection of shareholder interests, a fundamental shift from the previous focus solely on the corporation.
Activism in the country reached a watershed moment with 78 public campaigns recorded recently, supported by new mandates for cumulative voting in large listed companies. These reforms directly address the "Korea Discount" by empowering minority shareholders and requiring boards to justify capital allocation decisions more rigorously.
Regional governance bodies have also tracked recent reforms that lower procedural barriers for minority investors, including changes that make cumulative voting easier to invoke in large listed companies.
Southeast Asia will follow its path (albeit it's worth mentioning that many minority protection regulations are already stronger in Southeast Asia than they were in Korea before the recent reforms), shaped by local ownership structures and business culture. The opportunity for long-term investors sits in approaching that path with respect and persistence.
I view the relative scarcity of dedicated activist capital in the region as a responsibility as much as a positioning advantage. As far as we and the prospective investors we met can tell, Endurance Capital appears to be the only pure-play activist investment fund focused on listed companies in Southeast Asia. That is an unusual position in a region of this scale, and we do not take it lightly.
We are humbled and genuinely excited to discover that we are the early occupants of this lane, and we will sharpen our focus to manage that sector leadership position with great care and responsibility over the coming decades.
Activism earns legitimacy through outcomes, not through noise. The bar is therefore high: disciplined capital allocation, constructive engagement, and governance improvements that support durable compounding.
We also recognize that we are on a continuous learning journey. Global activist history offers a long record of what works and what does not. In particular, Japan and South Korea provide relevant reference points because both markets show how sustained governance pressure and patient engagement can, over time, shift not only corporate behaviour and market norms but also fundamental regulatory frameworks. We will continue studying those experiences and adapting the lessons to Southeast Asia’s operating realities.
Personal reflections going into 2026: the discipline required for the next chapter
A regional expansion forces me, as a founding partner and CIO of Endurance Capital, to approach the next phase with humility and with discipline.
Vietnam taught me countless lessons about emerging markets. Outsiders often apply developed-market playbooks too quickly and then misread outcomes when incentives, ownership structures, and operating constraints do not behave the way a familiar model predicts. In practice, the error is predictable, which is that investors import a template, push for speed, and assume additional capital can compensate for local execution risk.
Vietnam forced me to unlearn that approach. It made the limits visible early, which are that relationships cannot be accelerated, regulatory processes rarely compress on demand, governance change moves at a human pace, and operating execution remains the binding constraint even when financing is available. Progress compounds when it is built on local reality, not on imported assumptions.
Expanding into Indonesia and Malaysia requires the same approach. Listening comes first. Trust builds slowly. Local context is not a friction cost; local context is the edge. A regional strategy only works when the team has the right to operate inside each market’s ownership culture, governance norms, and relationship networks.
2026 will demand discipline in three areas.
- Selectivity: A wider opportunity set does not justify higher activity. A wider opportunity set raises the bar on filtering, because attention and engagement capacity remain finite.
- Depth: Regional investing rewards the same behavior that has worked for us in Vietnam, including time on the ground, first-hand due diligence, and a focus on incentives, governance, and decision-making inside companies, not merely reported financials and investor presentations.
- Substance in active ownership: Sector leadership in activism carries little meaning unless outcomes become visible in board effectiveness, capital allocation discipline, disclosure quality, and long-term shareholder value creation. Active ownership needs to show up in what companies do differently over time.
I also want to be clear about what I will not optimize for. I do not intend to optimize for short-term narrative validation. Markets can misprice fundamentals for extended periods, especially in less trafficked regions. The work is to stay anchored to intrinsic value and to execute the engagement required to close the gap, regardless of the constant emotional cycles of public markets.
Closing
2025 brought three forces into clearer alignment:
- Southeast Asia’s increasing role in global trade and production overtook China’s
- Renewed willingness among global allocators to reconsider emerging market exposure
- Our decision to extend a proven approach beyond a single market.
Endurance Capital III reflects a straightforward commitment. We will apply the same core strategy that shaped our work in Vietnam, which is long-term capital, concentrated selection, and collaborative active ownership, across a wider regional opportunity set. The objective remains unchanged - identify undervalued, high-quality companies - improve them through governance, capital allocation, and execution - then allow long-term compounding to do its work.
2026 is focused on delivery; let’s check in again on how Endurance Capital is doing across Southeast Asia in 12 months.
Christopher B. Beselin
Investing, compounding & exiting
Christopher B. Beselin - is the Chief Investment Officer of Endurance Capital. The views & opinions expressed in this newsletter is for informational and educational purposes only and should not be considered investment advice.
PS. If you are a qualified professional investor and want to think through how to structure long-term Southeast Asia exposure with an active ownership lens - feel free to schedule a 1-to-1 emerging market strategy call with Christopher B. Beselin via this link. DS.