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Asia’s Private Equity News Source avcj.com November 18 2014 Volume 27 Number 43
FOCUS DEAL OF THE WEEK
Economies of scaleAre ever-increasing fund sizes evidence of visionary GP or a greedy one? Page 7
Comfort with creditDealing with downside protection in Asia Page 11
Beijing to the beachPE sees Maldives as China tourist hotbed Page 13
DEAL OF THE WEEK
CHAMP Private Equity’s Joseph Skrzynski on the birth of Australian PE
Page 14
Japan’s J-Star combines hospice care businesses
Page 13
The VC valuation bubble may burst, but not with dotcom era consequences
Page 3
Auda, Baring Asia, CITIC PE, CVC, Hillhouse, Hony, KKR, LACERS, Lexington, LGT, Lightspeed China, MBK, NDE, OMERS, OTPP, Quadrant, RRJ, SAIF, Silver Lake, TPG
Page 4
EDITOR’S VIEWPOINT
NEWS
PROFILE
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Jason SambanjuHead of Asia, Private Equity Secondaries DEUTSCHE BANK PRIVATE EQUITY
Number 43 | Volume 27 | November 18 2014 | avcj.com 3
EDITOR’S [email protected]
IN BEIJING AND SILICON VALLEY, THERE IS cause for concern at the flood of capital entering the technology space. It draws comparisons with the dotcom bubble era – but VCs at the AVCJ Forum were keen to play down the similarities.
The primary criticism is that direct comparisons are fundamentally flawed. If the dotcom bubble was inflated by internet hype, the businesses now commanding high valuations are benefiting from an environment in which the internet is delivering on its promise. There are more internet users, faster connections, more mobile devices and better e-commerce.
And then the VC industry itself is arguably wiser. According to Preqin, in 2000, a total of 463 funds raised $77 billion. So far this year, $38 billion has gone into 220 funds. Fewer funds are backing start-ups that tend to be less capital-intensive than before. The lower cost of starting a business – and the increased capacity to do it from anywhere in the world – has also opened the door to more angel investors.
Certain companies are spending longer building scale under private ownership. Scott Kupor, managing partner with Andreessen Horowitz, told the AVCJ Forum there are two major trends at work in this context: the significant entry of new players into the private capital markets; and the fact that 90% of the largest venture capital rounds in history have happened in the last five years. Public market players feature ever more prominently in these.
China-focused VCs would add that their investments are still on steroids thanks to the combination of a rising middle class and the disruption effect of the mobile economy. Only
half of the country’s 600 million internet users are currently online shoppers. The converts will increasingly buy via mobile devices. “It is only a bubble if everyone is chasing the same trend, and I think as an industry we are staying ahead of the curve,” Ron Cao, managing director at Lightspeed China Partners, told the forum.
China VC fundraising stands at $6.4 billion so far this year, the most since 2011. The surge is driven by an uptick in exits in recent years as US IPOs resumed for Chinese companies and the likes of Baidu, Alibaba Group and Tencent Holdings went on the acquisition trail.
It is a similar story globally, with LP sentiment buoyed by improving returns. Preqin data on VC performance show a spike in performance for funds from the 2007-2010 vintages. Median IRR for the 2010 vintage is 14.5%; between 2000 and 2006, no vintage surpassed 5%.
This is all very encouraging but it does not remove the bubble debate, merely put it in a proper context. Valuations have spiraled upwards and – from a China perspective – when VCs talk about not having time to conduct as much due diligence as they would like and companies receiving funding that don’t deserve it (both issues came up at the AVCJ Forum), you don’t expect them to stay there. But at the same time, predictions of a brutal, dotcom bubble-style fallout might be wide of the mark.
Tim BurroughsManaging EditorAsian Venture Capital Journal
Bubble talkManaging Editor
Tim Burroughs (852) 3411 4909 Staff Writers
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PLUS an interactive session on entrepreneurship and venture capital: Innovating for a better India?
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Markus AbleitingerMD, Co-head of Investment Management Asia CAPITAL DYNAMICS
Jason SambanjuHead of Asia, Private Equity Secondaries DEUTSCHE BANK PRIVATE EQUITY
Global venture capital fund performance by vintage
Source: Preqin
25
20
15
10
5
0
-5
-10
-15
Net I
RR si
nce
Ince
ptio
n (%
)
Top quartile Median net IRR Bottom quartile
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
avcj.com | November 18 2014 | Volume 27 | Number 434
AVCJ FORUM
VCs cast doubt on dotcom era comparisonsVenture capital investors played down comparisons between the current soaring valuations in the technology space and the dotcom bubble era. Ron Cao, managing director with Lightspeed China Partners, said the key difference between today and the dotcom era was the size of the opportunity. “It is only a bubble if everyone is chasing the same trend, and I think as an industry we are staying ahead of the curve,” he said. David Yuan, a partner with Redpoint Ventures, added that there are still are some worrying side-effects to surging investment: some companies are raising more money than they need, while others that shouldn’t get funding are getting funding.
Location, talent will define Asia’s GP winnersAs the Asia’s PE market matures, the winners will be defined by those who not only leverage their local presence, but also retain the necessary talent, say industry participants. Speaking at the AVCJ Forum, Marshall Pare, managing director with Lexington Partners, described a market in which GPs are under increasing pressure from larger firms with enormous resources and experience at their disposal. Rodney Muse, managing partner with Navis Capital Partners, said the reason his firm continues to survive in this environment is because it is locally driven.
LPs offer mixed views on GP ownershipTaking a stake in the GP offers benefits to LPs looking to align interests, but not all are willing to do so at the cost of a fund manager’s independence. Ivan Vercoutere, CIO at LGT Capital Partners, told the AVCJ Forum that while his firm is willing to be a significant first-close investor, it had refrained from taking an interest in portfolio GPs because it wants GPs to be independent. On the other hand, Jacques Demers, global head of investment partners and partnerships at OMERS, stressed that making sure interests with fund managers were aligned trumped concerns over independence.
More China GPs look to tap outbound opportunityPE investors are seeing more outbound opportunities as China enters its second stage
of development, industry participants told the AVCJ Forum. “In the next 10 years China will move to the next stage of opening up,” said Tun Lin, chief economist and executive vice-president at Hony Capital. “In the first phase foreign capital came to China in the form of
FDI, but the next phase will see Chinese capital going abroad and bringing back quality services.” John Lin, managing partner with NDE Capital, said his firm is already looking to tap demand from China’s middle class for overseas products and services by investing in brands overseas that are undervalued in their own markets, and bringing them into China.
ASIA PACIFIC
RRJ leads $1b investment in Cheniere EnergyRRJ Capital has agreed to invest $1 billion in convertible notes issued by Cheniere Energy, a US-based liquefied natural gas (LNG) producer. The PE firm will invest from RRJ Capital II, but it could transfer a portion of the notes to Temasek Holdings.
CVC’s Hemal Mirani to rejoin HarbourVestHemal Mirani, head of Asia investor relations at CVC Capital Partners, will join HarbourVest Partners as a managing director. She previously spent over 11 years at HarbourVest before leaving for CVC in 2009. Mirani will have senior responsibilities covering investor relations as well as operations and logistics.
LACERS commits to Baring Asia’s sixth fundLos Angeles City Employees’ Retirement System (LACERS) has committed up to $25 million to Baring Private Equity Asia’s sixth pan-regional fund. Baring Asia Private Equity Fund VI reached a first close of $3.2 billion last month and is expected to close at the hard cap of $3.85 billion.
OTPP hires Mount Kellett executiveOntario Teachers’ Pension Plan (OTPP) has hired Dan Kiang from Mount Kellett Asia as Hong Kong-based director of relationship investing, with a remit to pursue direct deals across Asia. The relationship investing strategy is distinct from Teachers’ Private Capital, which is responsible for OTPP’s private equity funds and co-investment activities.
Auda hires FLAG Squadron’s Eunseok SoAuda International has appointed Eunseok So, formerly of FLAG Squadron Asia, as a senior vice
How Silver Lake secured Alibaba deal – AVCJ ForumSilver Lake’s 2.2% stake in Alibaba Group is worth more than $6 billion at current market prices, but internal approval for the original investment in the Chinese e-commerce player in 2011 did not come easily. The technology-focused private equity firm describes its investment approach as disciplined, valuation sensitive and control-oriented. Alibaba set two records: the highest valuation Silver Lake had ever paid for a deal in absolute terms and multiple terms; and the lowest percentage ownership.
“Alibaba was at the far end of an extreme for us format-wise,” Kenneth Hao, managing partner and managing director at Silver Lake, told the AVCJ Forum. “I remember one of my colleagues on the investment committee saying, ‘So your base case is an IPO with a $100 billion valuation. How many times has that happened before?’ At the time the answer was zero. It seems quite conservative now.”
Silver Lake invested a reported $300 million as part of a consortium that paid $2 billion for a 5.7% stake. Alibaba went public in the US earlier this year, raising $25 billion in the largest IPO ever seen globally. Silver Lake made a partial exit through the offering.
In 2011, however, it wasn’t only the mismatch with Silver Lake’s typical transaction that was causing doubts. Alibaba had just spun out its Alipay payments business, briefly causing tensions with major shareholders Yahoo and SoftBank. And then the transaction presented to Silver Lake was unusual: it was an entirely secondary offering, creating liquidity for employee shareholders. Joseph Tsai, executive vice-chairman at Alibaba, admitted that “most people would view that scenario as toxic.”
NEWS
Number 43 | Volume 27 | November 18 2014 | avcj.com 5
president in its Hong Kong office. A native of South Korea, So spent over three years at FLAG Squadron as a vice president. Before that he worked at Daishin Securities in Seoul.
AUSTRALASIA
TPG-owned Inghams sells $138m in real estate assetsTPG Capital-owned Australian poultry producer Inghams Enterprises has sold 31 properties to W.P. Carey, a US-based real estate investment trust, for A$157 million ($138 million). Inghams put a portfolio of over 50 industrial and agricultural properties on the market earlier this year. They were expected to fetch up to A$650 million.
Quadrant’s APN Outdoor sees 8% jump on debutShares in Australian advertising business APN Outdoor close up 4% on their first day of trading. The company raised A$329.3 million ($289 million) through its IPO, after pricing the offering at A$2.55 per share. Quadrant Private Equity realized proceeds of around A$210 million and saw its holding in APN fall from 93.7% to 20%.
KKR adds to Capstone team in AustraliaKKR has bulked up its operations capabilities in Australia with the addition of Matthew Claughton as a director with Capstone. He was most recently group general manager for Pacific Brands’ Workwear business unit.
GREATER CHINA
Hony-backed Jin Jiang buys Louvre HotelsShanghai Jin Jiang International, a Chinese hotel operator backed by Hony Capital, has agreed to buy Europe’s second-largest hotel group Louvre Hotels from US real estate investor Starwood Capital. The price reportedly exceeded EUR1.2 billion ($1.5 billion). Paris-based Louvre operates more than 1,100 properties in over 40 countries.
CITIC Securities, Shenzhen Capital back art platformCITIC Securities and Shenzhen Capital have invested $100 million in a Series B round of funding for Hihey.com, an online trading
platform for Chinese art. The platform enables new-generation artists to display their wares online, while providing a convenient and safe trading environment for prospective investors.
Sky Solar raises $44.2m in scaled back US IPOSky Solar Holdings, a Hong Kong-based independent power producer backed by IDG-
Accel China Capital, has raised $44.2 million through a US IPO. The company sold 5.52 million American Depository Shares at $8 apiece. It originally planned to sell 12.5 million shares at $10-12 apiece.
Hillhouse, CITIC PE commit $75m to cancer specialistHillhouse Capital and CITIC Private Equity have participated in a RMB450 million ($75 million) round of funding for BeiGene, a Chinese company that develops drugs to combat cancer. The round also included existing angel and strategic investors, as well as an undisclosed US-based life sciences-focused public fund.
NORTH ASIA
Baring Asia buys drug maker from Tokio MarineBaring Private Equity Asia has agreed to buy Japan-based Bushu Pharmaceuticals from Tokio Marine Capital at an enterprise valuation of JPY77.3 billion ($670 million). Tokio Marine purchased the company from Shionogi & Co. for JPY8.56 billion (then $93 million) in 2010.
MBK sells Japan-based Yayoi to Orix for $692mNorth Asia-focused buyout firm MBK Partners has exited Japanese accounting software firm Yayoi to Orix Corp. for JPY80 billion ($692 million). The company produces packaged software tailored to small- and medium-sized enterprises.
Tencent, Line invest $110m in Korean game developerChina’s Tencent Holdings and Japanese messaging app Line Corp. have invested $110 million in 4:33 Creative Labs, a South Korean, VC-backed mobile games developer.
SOUTH ASIA
SAIF-backed HomeShop18 abandons US IPOHomeShop18, an Indian TV shopping network and online market place backed by SAIF Partners and OCP Asia, has abandoned plans for a US IPO. This comes during a period of volatility in US markets, but also in the wake of the acquisition of HomeShop18’s parent, Network18, by Reliance Industries.
KKR, CITIC to buy majority stake in United EnvirotechCITIC and KKR have offered to buy a controlling stake in United Envirotech Limited (UEL) in a deal that values the Chinese waste water treatment company at S$1.9 billion ($1.5 billion). Singapore-listed UEL provides engineering services to municipal and industrial waste water treatment projects in China, and has clients from the chemical, petrochemical and industrial park sectors.
Under the pre-conditional voluntary offer, CITIC Environment Protection and KKR China Water Investment will acquire a controlling stake in the business through the acquisition of shares from existing shareholders - including a separate KKR-owned vehicle - at S$1.65 apiece.
Upon completion of the deal they will provide additional capital to UEL through a subscription to further shares via a private placement worth S$50 million, S$100 million or S$150 million. UEL will remain listed post-transaction. The investment will allow the two parties to help grow the business in China’s rapidly-developing environmental protection sector.
KKR invested $40 million in UEL last year, having previously committed $113.8 million to the company through a subscription to convertible bonds in October 2011. “Since 2011, we have been working closely with UEL’s strong management team to enhance UEL’s technological platform and expand its business through organic and inorganic activities,” said David Liu, co-head of Asia private equity at KKR and CEO of KKR China.
The transaction still requires regulatory approval.
NEWS
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Number 43 | Volume 27 | November 18 2014 | avcj.com 7
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IT TOOK AUSTRALIAN GP QUADRANT Private Equity just over a month to close its seventh fund at A$850 million ($758 million) earlier this year. Although the new vehicle was two times oversubscribed, there was no substantial increase in fund size on Fund VI, worth A$750 million.
The big jump came in the two previous vintages, 2007 and 2010, when in each case the fund expanded by close to 50%. Fund V was driven by pre-global financial crisis brio, while Fund VI was the first to include offshore investors. Parallels can be drawn with the strong demand for Archer Capital’s fifth fund, which closed in late 2011 at A$1.5 billion, but represented a relatively small increase in size on its predecessor. For Archer, the leap was from Fund III to Fund IV, when the corpus grew threefold.
This reset in expectations inevitably followed a bout of exuberance. Australasian managers raised nearly $21 billion between 2005 and 2007 – sums not matched before or since – and performance suffered.
Speaking at last year’s AVCJ Australia Forum, Peter Wiggs, managing partner at Archer, blamed the industry outgrowing its space. “The LPs gave the money to the GPs and the GPs spent it on dodgy deals and then we all lost it. What do you do? What I do is I size my market. I reckon I can spend this much money in four years sensibly. The fact that the market might want to give me twice that amount is irrelevant,” he said.
It is a lesson that many managers Asia’s emerging markets have yet to learn, or perhaps are only on the cusp of doing so. The region experienced its own pre-financial crisis boom and in the flight to quality that followed, LPs flocked to the relatively small number of managers with track records and brand names alongside their strong investment theses.
An escalation in fund size across vintages is not a new phenomenon in Asia but the fact it continues does beg the question of how much is too much. Is a manager responding to changing opportunity set or is he simply being greedy?
Thomas Kubr, executive chairman at Capital Dynamics, observes that ambition is not necessarily a bad thing. LPs want alignment of interest with GPs – the manager isn’t going to make money unless his investors get their cash
back. Discipline comes with time.“If you offer them twice the money, some
say they have the ability to scale their strategy and take twice the money,” he says. “There are exceptions, particularly in more developed private equity markets. In North America and Europe the quality guys got that message a long time ago. In Australia it’s the same; there are a few managers who have been out there for several generations now. They know how big their market is and what they can do.”
Recipe for a fundraiseNumerous considerations are woven into the sizing of a fund. There are three primary market-based reasons why a fund might be larger than its predecessor: economies and companies are growing, so the average deal size is likely to go up; existing team members are more experienced and new investment professionals have been hired, which means the sourcing net
is denser and wider; and the GP has identified an addressable gap in the market that requires additional financial firepower.
The above are factored in, to whatever degree they may apply to the situation, and ongoing deal flow mapping is used to establish what there is to invest in over the next five years and how much capital is needed. There may be other extenuating circumstances, ranging from pure ego to pushing above a certain size threshold so the major LPs consider the fund directly rather than referring it to an advisor.
Asian private equity fundraising stands at $49.7 billion so far this year (including incremental as well as final closes) after nosing ahead of the 2013 total of $49.4 billion. The 2012 figure of $55.3 billion possibly within reach; neutralize the distorting impact that renminbi-denominated vehicles had on the industry in 2011 and Asia could be on course for its best year since before the global financial crisis.
However, the number of funds that have attracted capital in 2014 is barely more than 200, compared to over 350 in each of 2013 and 2012. Average vehicle sizes have been on a general upward trend since 2009, but this year the figure has rocketed to $243 million, up from $135 million in 2013. For successfully raised funds only, the gap increases.
The flight to quality operates differently for pan-regional versus single country vehicles, largely driven by the perceived opportunities within individual markets.
Capital-raising for funds targeting China or India has slowed from the peak years and the money is flowing to the relatively few managers seen as actual or potential outperformers.
In the recent years, a couple of Indian GPs have reduced their fund sizes in response to a changing investment environment. Those currently in the market or about to enter it are generally seeking to raise roughly the same or only modestly more than in the previous vintage. The leading China-focused managers, however, are not necessarily being squeezed.
How much is too much?Ever increasing fund sizes have become a fact of life for some private equity firms in Asia. LPs must distinguish between GPs raising more capital for a valid purpose and GPs doing so simply because they can
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AVCJ Research can provide your firm with timely and accurate research support to help you simplify and expedite your workflow. We conduct in-depth research and provide insightful analysis in a bespoke report that fully meets your data requirements.
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✔Pan-Asian Industry Reviews/Regional Reports – timely updates✔Specific industry and financing stage research✔Comprehensive statistics on investments and funds ✔Exits strategic analysis✔Market peers comparison
AVCJ’s industry standard data is used by the world’s leading firms in their fundraising, investor relations communications and deal due diligence activities. AVCJ Customized Data Service includes:
Customized Research Report
Average fund size
Asia PE fundraising vs. average fund size
Source: AVCJ Research
100,000
80,000
60,000
40,000
20,000
0
250
200
150
100
50
0
US$
mill
ion
US$
mill
ion
Total funds raised
2003 200720052004 20082006 2009 2011 2013 2014YTD
2010 2012
avcj.com | November 18 2014 | Volume 27 | Number 438
“The global trend among institutional LPs is to be increasingly selective in choosing fund managers,” says Chris Churl-Min Lee, a Beijing-based associate with Cleary Gottlieb’s fund formation practice.
“And when the LPs look at China, they are presented with an increasing number of fund managers that are looking to raise offshore funds. While a number of experienced managers with strong track records have been able to successfully raise large funds relatively quickly, first time managers and managers with weaker track records can face a rather long and difficult fundraising process.”
CDH Investments closed its fifth US dollar-denominated China fund earlier this year at $2.55 billion after raising the hard cap slightly to accommodate investor demand. The process
took about 16 months and the fund is $1 billion larger than its predecessor. Hony Capital, operating in a friendlier fundraising environment, closed its fifth China fund at $2.36 billion in early 2012, also $1 billion larger than its predecessor.
Meanwhile, Boyu Capital and FountainVest Partners upped the size of their second China funds by 50% and 40%, respectively, although both are in the $1-1.5 billion range.
John Morrison, managing director at Munich Private Equity Partners, compares the situation to a “Darwinian land grab.” Firms are seeking to take advantage of their market position in order to ensure their place among the dominant players for years to come.
He accepts that PE firms are under pressure to meet the ambitions and financial expectations of its investment professionals. Increasing fund size is one way of achieving this, but the question LPs must answer is: Does this change the nature of the proposition?
“Every time you invest in a fund you can dwell quite a long time on the past but you also have to ask yourself who is best positioned to capitalize on whatever opportunities exist in the market over the next cycle. In a market that develops as rapidly as Asia, the players at the top end of the market have that depth of cross-border experience, that wherewithal to bring in true operational capability.”
MPEP has found itself in 2-3 situations where
the final consideration was whether it really wants to invest in a fund targeting substantially more than the previous vintage. In one case it ended up committing, convinced by the quality of the group and the efforts made to built out investment infrastructure; but there have also been situations in which it said no.
A couple of LPs told AVCJ that getting comfortable with larger China funds in part depends on being convinced the managers can execute the kind of larger cross-border transactions they say they have in their pipeline. Jonathan English, managing director at Portfolio Advisors, puts it in the broader context of GPs having institutionalized platforms capable of sourcing and dealing with challenging investments, while simultaneously meeting the reporting issues that come with running a fund.
“There are other groups in the region that would be attempting to make pretty big step-ups from their predecessor funds but I don’t think have gone through the institutionalization process,” he says.
Such assessments can equally well be made of the pan-regional managers. Between July 2012 and September 2014, nearly all of the largest global and Asia-based PE firms closed the first regional vehicles they have raised since the global financial crisis. Eight GPs collectively raised $27.2 billion. This is $5.3 billion more than the same firms raised for their previous vehicles, and in a difficult fundraising environment.
Bigger BaringThe missing member from this group – although its previous fund was raised post-crisis – is Baring Private Equity Asia, which is expected to close its sixth pan-regional vehicle at the hard cap of $3.85 billion.
Baring Asia is an interesting case study in that the firm has accelerated through the fund sizes over the last 10 years. Fund III closed at $490 million in 2006 and has since become one of the best-performing funds for its vintage in Asia and globally. This gave momentum to the next two vehicles, both of which came in substantially above target at $1.52 billion (2007) and $2.46 billion (2011).
According to separate disclosures by LPs,
Fund IV had delivered a net IRR of 10.2% and a multiple of 1.6x as of March, while Fund V was on an IRR of 9.9% and a total value multiple of 1.19x as of June.
“Fund III made LPs interested, so they raised Fund IV. LPs are still clamoring to get in off the back of Fund III but the verdict is still out on realized performance,” says one industry source familiar with the firm. “Fund IV is predicated on Nord Anglia [a school operator that went public in March]. Fund V is still very early in its life cycle and Fund VI will be a fresh pot of capital. We will see how history plays out and whether they have managed the evolution properly.”
The formula that served Baring Asia so well in Fund III – middle-market growth equity and buyout deals sourced on a proprietary basis, involving companies that want to scale up – has at least been modified. Fund IV targeted fast-growing companies with enterprise values of $100-300 million; for Fund VI, the equity check range is $50-300 million. The plan is for a diversified portfolio of 20-25 companies, but there may be more buyouts at the upper end of the scale.
These could be the same kinds of companies Baring Asia was backing in 2005, but they have grown in line with the economic opportunity in the region. Nevertheless, the strategy begs two questions. First, can the PE firm continue its existing approach to sourcing or will it increasingly end up in auctions against the large global and pan-regional players? Second, does Baring Asia have the operational capabilities to deal with the complexities facing larger and more international companies?
AVCJ spoke with several LPs, each of whom discussed concerns about Baring Asia’s fund size internally before deciding to commit.
“In these situations, we have to ask if the manager has built the infrastructure, created the approach and established the processes prior to raising the fund or has it raised the fund and then tried to reinvest in itself,” one LP explains. “Baring has built a highly professional structure, a multi-office environment we thought worked. They have the systems and processes to handle a growth in fund size.”
Another LP points to the efforts made in creating operations, financing and country-focused teams, as well as developing internship and training programs intended to ensure deep bench strength.
While Baring Asia can still point to a 17-year track record in the region and a core group of partners with experience of multiple business cycles, it has certainly brought in fresh talent. When raising Fund IV, the firm had 23 investment professionals across offices in Hong Kong, Shanghai, Singapore, Tokyo and San
COVER [email protected]
“Every time you invest in a fund you can dwell quite a long time on the past but you also have to ask yourself who is best positioned to capitalize on whatever opportunities exist in the market over the next cycle” – John Morrison
COVER [email protected]
Francisco. Headcount is now 100, of which 51 are investment professionals, and offices have been added in Beijing, Jakarta, Mumbai and Singapore, although the San Francisco presence has gone.
There are no guarantees of performance and a number of industry participants claim that Baring Asia is raising too much capital and will struggle. Even if Fund VI performs well, others in the $3 billion-plus fund size space – that now also includes Affinity Equity Partners, The Carlyle Group, CVC Capital Partners, KKR, RRJ Capital and TPG Capital – may not.
“It’s not like it doesn’t still cause concern when CVC, Carlyle and everyone else has raised a sizeable fund around the same time,” observes one North American LP. “There is a lot of capital at that high end of the market.”
Expansion plansMuch like Baring Asia, other pan-regional players have expanded their footprint since the last cycle. Affinity closed its fourth fund at $3.8 billion earlier this year, having raised $2.8 billion for its 2006 vintage predecessor. The firm decided against expanding its geographic remit to include Japan and India, but increased headcount by 50% and opened offices in Beijing and Jakarta, for a total of six.
Ahead of closing its second Asian fund at
$6 billion in July 2013, KKR opened its seventh regional base in Singapore and also brought in additional talent, creating a localized operational presence to complement its already localized investment team. Asked whether $6 billion was too big, Joe Bae, KKR’s regional head, told AVCJ last year that the target was based on the encouraging returns generated by the more than $5.5 billion it had deployed in Asia over the previous 6-7 years, as well as the increasing resources being put on the ground.
Portfolio Advisors’ English questions how easy it is to turn $6 billion into $12 billion and what cost of capital is incurred by each investment platform. “I would say there is a varying cost of capital at play in terms of what are realistic return expectations, what the GP is happy with, and what the LP base is happy with,” he says. “When you start getting to $3.5 billion plus funds in Asia the verdict is still out.”
Another issue that must be factored into this debate is co-investment. For example, it has been estimated that the $3.3 billion TPG Capital raised for its most recent pan-Asian fund could translate into $4.5 billion in firepower given LP appetite for additional direct exposure to deals.
One regional buyout fund manager tells AVCJ that ticket sizes at the top end of the market are growing even faster than fund sizes – perhaps
a reflection of the level of competition this segment.
The largest pure private equity buyout in 2014 to date is The Carlyle Group’s $1.9 billion acquisition of security services business ADT Korea. With debt financing said to be around $1.2 billion and equity participation from two Carlyle funds, there was likely still ample room for co-investment. The big minority deal of the year, which saw 25 investors commit $17 billion to Sinopec’s retail business, also featured individual check sizes substantial enough for sharing.
While co-investment tends to be limited to a handful of large and sophisticated LPs, the level of interest expressed could ultimately tempt a GP – already on course to raise a larger fund than before – to push the strategy even further. It is a reminder that ambition or greed on the part of the manager is not the only force driving fund sizes ever higher. The slicing and dicing of allocations towards the end of a popular fundraise is usually done to accommodate LPs.
“You can always package a larger fund as the economic opportunity evolving,” says Vincent Ng, a partner at placement agent Atlantic-Pacific Capital. “And there are always two sides to the coin: a supposedly greedy GP milking as much as he can, and also an LP that is perhaps putting money in thoughtlessly.”
The AVCJ Private Equity and Venture Capital Reports provide key information about the fast changing Asian private equity industry. Researched and compiled by AVCJ’s industry leading research team, the reports offer an in-depth view of private equity and venture capital activity in Asia Pacific, as well as in major countries and regions including Australasia, China, India, North Asia and Southeast Asia. Each AVCJ Report includes the latest statistics and analysis, delivering insights on investments, capital raising, sector-specific activity. The reports also feature information on leading companies and business transactions. For more information, please contact Sally Yip at +(852) 3411 4921 or email [email protected].
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GLOBAL PERSPECTIVE, LOCAL OPPORTUNITY
Taiwan 2014 Private Equity & Venture Forum
avcjtaiwan.com
20 November • Westin Taipei
avcjtaiwan.com
Confirmed speakers include:
Keynotes:
Ming Bin Chang Deputy Director-General INVESTMENT COMMISSION,MOEA
Shih-Chao Cho Deputy Minister MINISTRY OF ECONOMIC AFFAIRS
KAO Shien-quey Deputy Minister NATIONAL DEVELOPMENT COUNCIL
Weichou SuPartnerSTEPSTONE GROUP
Gordon ShawManaging Director, ShanghaiBARING PRIVATE EQUITY ASIA
Steven R. OkunPublic Affairs Director, Asia PacificKKR
CY HuangPresidentFCC PARTNERS
Alex Ying Managing DirectorTHE CARLYLE GROUP
Eric Sun Senior Manager, Alternative InvestmentNANSHAN LIFE INSURANCE
Andrew S. Hawkyard Chief Operating OfficerMORGAN STANLEY PRIVATE EQUITY ASIA
Tien-Mu HuangVice ChairpersonFINANCIAL SUPERVISORY COMMISSION (FSC)
Nicky Lu Chairman & CEOETRON TECHNOLOGY, INC.
Kurt Tong Principal Deputy Assistant Secretary, Bureau of Economic and Business Affairs U.S. DEPARTMENT OF STATE
Calvin LinCEOMACROWELL OMG DIGITAL ENTERTAINMENT
Cjin Cheng EIR (Entrepreneur in Residence)500 STARTUPS
Richard HsuManaging DirectorINTEL CAPITAL
For the latest programme and speaker line-up, please visit avcjtaiwan.com
Simultaneous translation is available活動全程提供中英文同傳。
Registration enquiries: Pauline Chen T: +852 3411 4936 E: [email protected] enquiries: Darryl Mag T: +852 3411 4919 E: [email protected] enquiries: Joy Qian T: +852 3411 4866 E: [email protected]
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Number 43 | Volume 27 | November 18 2014 | avcj.com 11
FUNDRAISING ACROSS ALL SEGMENTS in private debt – which covers direct lending, distressed debt and mezzanine financing – has increased significantly since the global financial crisis. The number of funds raised globally more than doubled between 2009 and 2013. In 2013, there were 137 successful closes. Capital inflows have also soared from $23 billion in 2009 to over $77 billion in 2013, according to Preqin.
Although North America and Europe have been the primary targets, LPs and GPs recognize the role private debt can play as an alternative to pure equity strategies in Asia. Most importantly, it can help address the imbalance created when the expansion in small and medium-sized enterprises was not accompanied by similar growth in lending from traditional sources.
KKR has been providing local currency structured financing in India for several years. In August, it rolled out a similar strategy in Southeast Asia with the appointment of Jaka Prasetya to lead regional credit and special situations initiatives. Meanwhile, Intermediate Capital Group (ICG) has entered the Japanese mezzanine space and Olympus Capital Asia has launched a dedicated credit arm (OCA Credit).
“The key components for LPs are downside protection and enforceability,” Josh Stern, senior investment officer at the US-based Robert Wood Johnson Foundation, told the AVCJ Forum in Hong Kong. “In the US, it’s one jurisdiction and it’s a large market. But the difference in returns expectations in Asia is the incentive that we want to go for outside of our geography.”
The enforcement issue is complicated by Asia’s varied legal systems. How can debt specialists construct deals, across different geographies and credit strategies, while simultaneously creating solid downside protection for investors?
For OCA Credit, downside protection means being able to secure collateral and enforce creditor rights onshore. With the preservation of capital a priority, the firm looks more at developed markets, such as New Zealand and Australia, while emerging markets like Southeast Asia remain a challenge.
“The question is what happens if you’ve got a Singapore holding company with assets in an emerging market,” said Gary Stead, managing director at OCA Credit. “We don’t want cash trap.
We don’t want to rely just on how the sponsor would behave in a default situation. We want certainty, and for this we want things stitched up in multiple ways. We don’t need to do this in Australia and New Zealand.”
Much like OCA Credit, ICG has a preference for Asia’s developed markets, with Australia and New Zealand accounting for about 40% of its exposure to the region. Chris Heine, managing director at ICG, noted that while mezzanine funds are relatively rare in developing Asian countries, his firm completes about 70 deals a year in Japan. ICG’s recently-formed mezzanine fund with Nomura is looking to exploit an expected rise in demand from domestic corporates.
The company relies on debt instruments for downside protection. These usually come with an annual coupon and an equity kicker, either warrants or co-investment. Heine sees more upside in holding investments for longer periods
and working alongside other stakeholders. As a result, ICG has been investing in the Asia Pacific region since 2002 but has yet to enforce security.
Not just collateralWhile collateralizing assets is an important consideration for ICG and OCA Credit, KKR’s Prasetya sees it as just one part of the credit business – there are other ways to ensure downside protection in Southeast Asia, and Indonesia in particular. While the country’s bankruptcy system is still unproven, Prasetya said, the system of enforcing creditor rights is among
the most advanced in the region. “In China, you’re not allowed to use local
assets to secure International debt. It’s the same in India,” he added. “But in Indonesia, you can write your loan agreement into international law, which could be in Singapore or the UK.”
Those with China credit exposure tend to construct deals through a network of offshore entities to ensure they are in compliance with the law. Offshore GPs would also partner with licensed onshore lenders so that assets can be collateralized. But the process can be challenging.
In Indonesia, creditors and target companies can set up a security arrangement. If the borrower breaches of obligation under the Singapore law, for example, the lender could assume ownership of the assets. “One, there is a value for the asset; two, it’s not as bad as expected in Indonesia when you think about security arrangement,” added Prasetya.
KKR isn’t alone in seeking to tap Southeast Asia’s private debt market. A few months ago, Singapore-based United Overseas Bank (UOB) and Japan’s Orix Corp. launched a mezzanine fund to provide expansion capital to mid-sized companies in the region.
The companies that UOB and KKR invest in aren’t necessarily distressed; they just don’t see equity as the best solution for their capital needs. Prasetya therefore stressed the importance of having the flexibility. Once the relationship with the entrepreneur is established, opportunities for traditional PE funding may emerge later on.
Enforcement issuesInvestors see great potential in Asia’s private debt markets, but some GPs and LPs’ attitudes towards downside protection and enforceability keep them out of emerging markets
Breakdown of private debt funds raised by primary geographic focus
Source: Preqin
2009 2010 2011 2012 2013 2014YTD
Asia & rest of world Europe North America
100
80
60
40
20
0
%GLOBAL PERSPECTIVE, LOCAL OPPORTUNITY
Taiwan 2014 Private Equity & Venture Forum
avcjtaiwan.com
20 November • Westin Taipei
avcjtaiwan.com
Confirmed speakers include:
Keynotes:
Ming Bin Chang Deputy Director-General INVESTMENT COMMISSION,MOEA
Shih-Chao Cho Deputy Minister MINISTRY OF ECONOMIC AFFAIRS
KAO Shien-quey Deputy Minister NATIONAL DEVELOPMENT COUNCIL
Weichou SuPartnerSTEPSTONE GROUP
Gordon ShawManaging Director, ShanghaiBARING PRIVATE EQUITY ASIA
Steven R. OkunPublic Affairs Director, Asia PacificKKR
CY HuangPresidentFCC PARTNERS
Alex Ying Managing DirectorTHE CARLYLE GROUP
Eric Sun Senior Manager, Alternative InvestmentNANSHAN LIFE INSURANCE
Andrew S. Hawkyard Chief Operating OfficerMORGAN STANLEY PRIVATE EQUITY ASIA
Tien-Mu HuangVice ChairpersonFINANCIAL SUPERVISORY COMMISSION (FSC)
Nicky Lu Chairman & CEOETRON TECHNOLOGY, INC.
Kurt Tong Principal Deputy Assistant Secretary, Bureau of Economic and Business Affairs U.S. DEPARTMENT OF STATE
Calvin LinCEOMACROWELL OMG DIGITAL ENTERTAINMENT
Cjin Cheng EIR (Entrepreneur in Residence)500 STARTUPS
Richard HsuManaging DirectorINTEL CAPITAL
For the latest programme and speaker line-up, please visit avcjtaiwan.com
Simultaneous translation is available活動全程提供中英文同傳。
Registration enquiries: Pauline Chen T: +852 3411 4936 E: [email protected] enquiries: Darryl Mag T: +852 3411 4919 E: [email protected] enquiries: Joy Qian T: +852 3411 4866 E: [email protected]
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Number 43 | Volume 27 | November 18 2014 | avcj.com 13
NOT FOR THE FIRST TIME, J-STAR PLANTED the seeds of its latest investment while in pursuit of another deal.
The Japanese mid-market GP was one of a number of bidders for a home nursing care provider but lost out to a domestic strategic investor. However, J-Star built a rapport with Tadashi Takahashi, the company’s CEO, who liked what it was proposing.
It wasn’t long before Takashashi and his team, unhappy under the new owner, left to set up a new business. Kairos offers home nursing services in the Kanagawa region from two nursing care stations and also runs a hospice facility that looks after patients with later stage cancer and intractable diseases such as ALS. The business model is based on that of Nurse Call, which runs two nursing care stations in Nagoya. This company was set up by Toyomi Yoshida in 2002, and she faced succession-planning issues.
J-Star suggested Yoshida consolidate the two companies and invite Takahashi to serve as CEO of an expanded Nurse Call.
“Yoshida is something of a legend in the
industry and a mentor to Takahashi,” says Tatsuya Yumoto, a partner with J-Star. “She told Takahashi that she would consider selling her business to him, but he needed the capital so he came to J-Star for support.”
As a result, J-Star has acquired both companies – with Takahashi retaining a single digit stake in the business and acting CEO of both companies, which will eventually be combined. The financial details of the transaction were not disclosed, but J-Star typically invests $5-10 million per transaction.
The private equity firm is tapping into a well-established demographic play in the country: an aging and declining population’s rising demand for healthcare services. “Last year 1.3 million people died in Japan; next year it will increase to $1.7 million,” says Yumoto. “Of those people, 80% die in hospital. The issue is most people would prefer die at home, but with the proper care.”
J-Star is also banking on a change in social
welfare policy. By shifting more resources to supporting home care services for those with long term illnesses, the government hopes to alleviate pressure on the country’s over-stretched in-patient hospital services. “Hospitals are really
the evil in the system because they can be a high-cost and an ineffective solution for these patients,” says Yumoto. “The government wants more of these patients in more cost effective private sector home care.”
While policy can sometimes be unpredictable, Yumoto stresses the tide is moving in
favor of companies like Nurse Call and Kairos. The only significant risk is the labor shortage in Japan, but J-Star is confident of securing the required talent.
The private equity firm has reason for optimism in healthcare. This month it exited in-home care services provider HCM Corporation via a trade sale to Alshok Group, generating an 8x money multiple.
CHINA HAS BECOME THE PRIMARY SOURCE of tourists to the Maldives. In the first six months of 2014, more than 170,000 Chinese travelers flocked to the islands, up 20% year-on-year. They accounted for nearly one in three visitors, according to the Maldives Tourism Ministry.
Seeing this growth, Chinese PE firm Sailing Capital set its sights on a luxury resort developer – Soneva Group, which operates the Soneva Fushi resort on the island of Kunfunadhoo. The courtship coincided with President Xi Jinping’s visit to the Maldives in September, which brought with it a string of infrastructure initiatives.
Last week, Sailing announced it would take a significant minority stake in Soneva Group. It is the largest Chinese investment in the Maldives to date, but Chris Roling, Hong Kong-based managing director and partner at the PE firm, expects more capital to follow. Now the country is on China’s political radar, there will be billions of dollars for houses, bridges and airport
facilities “which help our investment as well,” he says.
Built by Eva and Sonu Shivdasani in 1995, Soneva is the oldest resort operator in the Maldives. The company owns a resort in Thailand under the Soneva Kiri brand, but Sailing is primarily interested in Soneva Fushi. The group
also developed the Six Senses Resorts and Spas brand before exiting the assets in 2012.
Soneva is profitable but requires a strategic partner to reach the next stage of development. Sailing will support the company in expanding the existing resort and attract more Chinese
tourists through leveraging its relationships with large domestic tourism agencies.
Meanwhile, the bulk of the new capital will go towards developing a new Soneva resort on a different island. The building process is expected to take 14-18 months. As part of this development, Sailing will provide additional
funding for a few residential villas. Rather than situated on the beach, these new properties will be over water, as a better fit for Chinese tastes.
“We think the returns on the hospitality side and the residential side will be very attractive,” Roling says. “We also intend to market the brand much more aggressively and put in more Asian features, not exclusively to Asian tourists but probably more than Soneva has branded itself in Asia in the past.”
Sailing’s holding period for investments is five years. In the later stages, the private equity firm will look to expand Soneva outside of the Maldives, with a particular focus on China. It also plans to strengthen the resort operator’s sustainability profile by promoting environmentally friendly processes and raising ecological awareness.
The investment comes out of Sailing’s cross-border fund, which reached a first close of RMB12 billion in 2012. Given the investor base comprises strategic investors, there is a natural first port of call when the PE firm decides it is time to exit the asset.
DEAL OF THE [email protected]
J-Star in hospice care double deal
Sailing to the Maldives
Home care: Going private
Asian Venture Capital Journal
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Maldives: Tourist magnet
avcj.com | November 18 2014 | Volume 27 | Number 4314
FEW PE PROFESSIONALS CAN CLAIM TO have started investing straight out of university; even fewer have been able to spend their early careers doing venture, growth and buyouts. In the early 1970s Joseph Skrzynski , founding partner of CHAMP Private Equity, was granted this freedom when he landed his first job managing private investments from a wealthy Australian industrialist’s balance sheet.
“I had learnt an enormous amount from him as he was a very experienced business man,” says Skrzynski, who landed the job following a chance introduction. “I didn’t see myself as a corporate person, but I did see myself as doing something entrepreneurial. When I was told he needed someone to look after the investment side of his business I thought it was perfect.”
Still a fresh-faced graduate from the University of Sydney, Skrzynski took part in his first buyout in 1973. It was the privatization of Ford Sherington, best known for the Globite suitcases popular among travellers and schoolchildren. Skrzynski remembers this as a time when the concept of private equity did not really exist in Australia – or anywhere else for that matter.
“Back then if you were an investment banker and you said to your client, who was trying to sell a division, ‘Why don’t you look at a management buyout?’ it would have been an insult – you would have been thrown out of the boardroom,” he says. “Today you would be thrown out of the boardroom if you didn’t have a buyout as one of your alternatives to a trade sale or float.”
Bits and piecesSydney-based Ford Sherington was the ideal candidate for such a deal. The company had a strong brand name and legacy, but it was also undervalued and struggling to compete in an increasingly global market. It tried to fight the tide by introducing new businesses lines and targeting a younger demographic. Ford Sherington even had someone working exclusively on new product ideas, most notably developing car seats for babies.
“In those days balance sheets were cost-based rather than market value-based so it was totally undervalued,” says Skrzynski. “We decided to sell up the property and discontinue the luggage business – which was falling over from imports – and then got behind the entrepreneur
who was making the baby seats.” The deal was a buyout, an asset play and
an entrepreneurial seed play. Not only did it deliver a healthy return from the difference in the purchase price of the company and the value of its assets, but the investment also embraced innovation. It typified the kinds of opportunities available in the early days.
“We did a bit of everything over those first years; it was terrific fun and there was very little competition,” recalls Skrzynski. “That was also when I got to know my current partner Bill Ferris.”
Skrzynski got to know Ferris – another alumnus of University of Sydney, but two years his senior – after he returned back to Australia following his MBA at Harvard. Ferris had also got an early start in investing, managing a fund on behalf of five wealthy families. The two gradually
got to know each other through their deal activity in Australia’s nascent PE and VC industry.
In 1987, the two set up a fund under the name Asian Mezzanine Partners (AMP). It was the first institutionally-funded private equity vehicle in Australia and their timing could not have been better. “The crash had come and the investors had taken a deep breath decided that with the capital markets closed to young companies, there was going to be a greater need for private equity,” says Skrzynski. “So they backed us.”
AMP raised A$30 million (then around $21 million) for its first fund from four local superannuation funds. Again Skrzynski found himself targeting opportunities across seed capital, growth stage investment and buyouts. “Back then, the big question was ‘Wow, A$30 million is a lot of money, are you going to be able to invest it?’ We still get the same question every time we raise a new vehicle – our most recent fund was A$1.5 billion.”
The strategy remained the same for AMP II – offering all three aspects of private equity – and by then the LP based had grown to eight, with
a total commitment of A$50 million. It was not until it was time to raise a third fund that the idea of private equity began to catch on. AMP decided to separate out its strategy into three vehicles. The company’s seed stage activities would continue as the AMWIN fund, a joint venture with Walden International in Asia and the US, and the growth capital and buyout strategies would split into the two further vehicles.
For this purpose Skrzynski and Ferris decided to team up with New York-based mid-market GP Castle Harlan. Castle Harlan Australia Mezzanine Partners was a bit of a mouthful, so they settled on the name CHAMP. CHAMP Ventures became the growth stage investment arm, while the new CHAMP Private Equity handled buyouts.
Going overseas The international tie-up suited AMP, which had already been looking beyond its borders. The firm’s investments were in Australia, but it targeted companies with regional or even global strategies – as CHAMP still does today. Datacraft, which listed in Singapore in 1997 – was a classic
Outback and beyondJoseph Skrzynski, one of the founding partners of CHAMP Private Equity, began his career before the asset class properly existed in Australia. He has played a pioneering role in its development
“Back then, the big question was ‘Wow, A$30 million is a lot of money, are you going to be able to invest it?’ We still get the same question every time we raise a new vehicle”
example. It was an Australia-based company that had started offshore operations in Hong Kong and Singapore, but 80% of the business was in Australia and only 20% was in Asia.
“By the time we finished with the investment, 80% of the business was in Asia and 20% of the business was in Australia,” says Skrzynski. “It had grown so quickly in the Asian market that it really gave us a feel for doing the ‘Australia plus’ investment strategy.”
At the same time, CHAMP was targeting a new crop of overseas investors for CHAMP Private Equity I. Skrzynski recalls that for most of the 1990s, the largest groups of investors were either based in North America or Europe, and they tended to prioritize domestic investments. Few were investing in Asia, but that would change.
By 2000, the CHAMP team had already spent around four years meeting overseas investors, and they were beginning to build a network. After 13 years in the business they also had that all-important track record.
“The first overseas investor we secured was HarbourVest Partners,” says Skrzynski. “They had established a Hong Kong office and were active in the region. The fact we had a US partner, and there was someone they could call in New York as well as in Sydney, had also helped give our investors’ confidence.”
After securing their first oversea institutional investor, not only was CHAMP – which raised A$500 million for Fund I – able to chalk up another first for Australian private equity, but it also helped legitimize the jurisdiction in eyes of the LP community. Before long, other Australian funds had begun to follow suit. Skrzynski recalls the turn of the millennium as a positive time for his firm in general. It was also the era of the dot-com boom and, like everyone else, CHAMP was caught up in the excitement.
“It was just at the end of the boom and a very impressive guy came to us and outlined what was essentially a search engine business plan,” says Skrzynski. “He was articulate, and his ideas were well thought through. The only problem was when he said: ‘... And I need the money by next Thursday.’ That broke one of our rules, but somehow he convinced us to back him.”
The investment was LookSmart, a deal Skrzynski describes as a 100-to-one deal – they invested A$1 million and got back A$100 million. When LookSmart listed on NASDAQ in 2000 at a $1 billion valuation, it was the highest capitalization for a non-US company debuting on the bourse that year.
“We didn’t know the dotcom crash was coming, but we knew 100-to-one was good, so we weren’t greedy; the moment our shares came
out of escrow we sold,” says Skrzynski. “We exited over the complaints of some of our younger team members, who were caught up in the whole dotcom thing. But we got out, and three months later the market collapsed.”
Nearly 15 years on, CHAMP has raised three funds – not including the two vehicles raised as AMP – with committed capital of nearly A$3 billion. Meanwhile, growth capital affiliate CHAMP Ventures is now investing out of its seventh fund, which has a corpus of A$450 million. After over 40 years in the business, and nearly 30 years running CHAMP, Skrzynski – with his colleague Ferris – is considering succession.
With the formation of CHAMP III Fund – the A$1.5 billion vehicle – in 2009, the two founders began transferring equity to the senior managers from the next generation. Earlier this year, John Haddock was appointed CEO. He will lead the company in the next fund cycle.
Skrzynski and Ferris intend to remain on the investment committee, but will eventually step back into a mentoring role as they transition out of the day-to-day running the firm’s portfolio companies. “To see the landscape change so much – and to see how the infrastructure has built up around Australian private equity industry – I am as proud to have helped build that, as I am to have co-founded CHAMP,” says Skrzynski.
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The Hong Kong Venture Capital & Private Equity Association (HKVCA) is pleased to announce that the Asia Private Equity Forum 2015 will be held on Wednesday, January 21, 2015. APEF 2015 will once again follow immediately the Hong Kong Government’s Asian Financial Forum and will be held in the magnificent Hong Kong Convention and Exhibition Centre.
To register, please visit apef.hkvca.com.hk Tel: +852 2167 7518 Email: [email protected]
Information in this leaflet is correct at the time of printing. HKVCA represents the rights to amend any details due to unforeseen circumstances
Organiser: Co-organiser: Media Partner:
Josh Porter, Managing Director, Advantage Partners
David Seex, Managing Director & Head of Asia Pacific, Adveq Management (Hong Kong)
Wendy Zhu, Managing Director, AlpInvest Partners
Steve Martinez,Head of Asia Pacific & Senior Partner, Private Equity, Apollo Management
Liang Meng, Managing Partner, Ascendent Capital Partners
Akihiko Yasuda, Managing Director, Asia Alternatives Management
Ernest Boles, Chief Executive Officer, Auda International
Larry Chan, Executive Vice President, Bain Capital Asia
Michael Thorneman, Managing Partner, Bain & Company
Mark Fogle, Managing Director & Head of Real Estate, Baring Private Equity Asia
Rahul Bhasin, Managing Partner, Baring Private Equity Partners
Edward Huang,Senior Managing Director, Private Equity,Blackstone
Tamotsu Adachi, Managing Director & Co-representative in Japan, The Carlyle Group
Stuart Schonberger, Managing Director, Head of Investor Relations, CDH Investments
Peter Fuhrman, Chairman & CEO, China First Capital
Eric Mason, Managing Director – Asia Investments, The Church Pension Fund
Joseph Wan, Operating Partner, Cinven HK
Brahmal Vasudevan,Founder & Chief Executive Officer, Creador
Charles Huh Senior Managing Director, CVC Capital Partners
Patrick Yip, National M&A Leader, Deloitte China
Dominic Scriven OBE, CEO, Dragon Capital Group
Alexander I. McCloskey,Partner & Head of South Asia, Emerald Hill Capital Partners
Martin Mok, Partner,EQT Partners Asia
Gary Lawrence,Managing Partner & Founder,Excelsior Capital Asia
Sameer Sain, Co-founder & Managing Partner, Everstone Capital
Gopal Jain, Co-founder & Managing Partner, Gaja Capital
George Anson, Managing Director, HarbourVest Partners (U.K.)
Marcus Thompson,CEO,Headland Capital Partners
Dr. Ashish Gupta,Senior Managing Director,Helion Ventures Partners
Conrad Tsang, Chairman, HKVCA
David Pierce, Managing Director & Head of Asia, HQ Capital
Alex Mong,Senior Investment Director,InfraRed NF Investment Advisers
Hidemi Moue, CEO,Japan Industrial Partners
Eric Chan, Managing Director, Private Equity Group, JP Morgan Asset Management
Gregory Hara, Director & CEO, J-STAR
Jesse Sheley, Partner, Corporate, Kirkland & Ellis
Bryan Southergill,Director & Asia Head of Real Estate,KKR Asia
Gaurav Dalmia, Chairman, Landmark Holdings
Craig Wilkinson, Regional Managing Director, LDC (Asia)
Mark Chiba, Group Chairman & Partner,The Longreach Group
Derek Sulger,PartnerLunar Capital
Robert Mast, Partner, Monument Group
Nicholas Bloy, Co-managing Partner, Navis Capital Partners
Brock Williams,Senior Vice PresidentNeuberger Berman
Patrick Walujo, Co-founder & Managing Partner, Northstar Equity Partners
Raju Ruparelia, Senior Principal, Teachers' Private Capital, Ontario Teachers' Pension Plan (Asia)
Broderick Storie,Managing Director & Partner, PAG Real Estate
Jie Gong, Partner, Pantheon Ventures (HK)
Christian Paul,Principal, Permira Advisors
Jonathan English, Managing Director,Portfolio Advisors (Hong Kong)
Velisarios Kattoulas, CEO, The Poseidon Group
Mark O’Hare, Founder & Chief Executive, Preqin
Hans Jung, Executive Vice President, STIC Investment
Peter Ryan-Kane, Head of Portfolio Advisory, Asia Pacific, Towers Watson
Steve Sun, Partner & Managing Director, TPG Capital
Javad Movsoumov,Executive DirectorUBS Private Funds Group
John Lewis, Chief Executive Officer,Unitas Capital
Jason Shin,Co-founder & Managing Partner,Vogo Fund
Alexa Zhang, Managing DirectorWilshire Associates
Free LP Passes for Pension Funds, Fund of Funds, Endowments, Foundations, Family Offices, DFIs and Sovereign Wealth Funds. Register: [email protected]
Quote "APEF_AVCJ" code to enjoy 20% discount off (non-member rate) of a ticket for all AVCJ subscribers
Opening Remarks Opening Keynote Luncheon Keynote Closing Keynote
Tsang Chun-wah, John, GBM, JP Financial Secretary,HKSAR
Gabriel Li, Managing Partner & Investment Committee Member, Orchid Asia Group Management
H. Chin Chou, Managing Director, Morgan Stanley Asia
Christoph Rubeli,Partner & Co-Chief Executive Officer,Partners Group AG
January 21, 2015 (Wednesday), S221, Hong Kong Convention and Exhibition Centre