page 5 australian market prospects: clear roads ahead? · honma golf to prc group ant capital...
TRANSCRIPT
AVCJ Private Equity & Venture Forum 2010
Japan 21 - 22 April 2010
Asia’s Private Equity News Source avcj.com March 2 2010 Volume 23 Number 8
ASIAN VENTURE CAPITAL JOURNAL
PRIVATE EQUITY ASIA
M&A ASIA
Australian market prospects: Clear roads ahead?Investment opportunities in an uneven economy: Part 2 Page 10
Fundraising Q&A: Simon Hua, BOCOM International
Page 13
Fundraising report
AVCJ Private Equity & Venture Forum 2010 Conference series
Australia: Ripe for mezzMezzanine may increase its presence in Australia, but not overnight Page 8
anZ meZZanine special
SWFs in AIA Pru-ve power shift Page 3
editor’s Viewpoint
Unison Capital to acquire MK for real estate
Page 12
deals oF the week
Private equity and VC news of the week, with Bain Capital, ChrysCapital, Hony Capital, Macquarie, Morgan Stanley, Providence, Neuberger Berman, Spring Capital
Page 5
news
aVcJ research
Private Equity Data File Page 16
industry Q&a
Industry Q&A: Andrew Legge, Dragon Capital
Page 15
Fundraising report
Carlyle partners with Fosun for JV, RMB fund
Page 14
Contact Anil Nathani \ T: +(852) 3411 4938 \ E: [email protected]
Japan Private Equity: Riding a new wave of confidence?ANA InterContinental, Tokyo
Contact Anil Nathani \ T: +(852) 3411 4938 \ E: [email protected]
Confirmed speakers include:
Japan 2010AVCJ Private Equity & Venture Forum
21 – 22 April 2010 Global perspective, local opportunities
KEYNOTE SPEAKERS
Richard FolsomRepresentative PartnerADVANTAGEPARTNERS, LLP
Hiromichi MizunoPartnerCOLLER CAPITALLIMITED
Anthony MillerPresident & CEOPACIFIC ALLIANCEJAPAN LIMITED
Kazushige KobayashiPresident & CEOALTERNATIVEINVESTMENT CAPITAL LTD
Philip Bilden Managing DirectorHARBOURVEST PARTNERS (ASIA) LIMITED
Joseph W. Ferrigno IIIManaging PartnerASIA MEZZANINECAPITAL GROUP
Soichi KariyazonoPartnerGLOBIS CAPITALPARTNERS
Jun TsusakaPartnerTPG CAPITAL
Tatsuo KawasakiPartnerUNISON CAPITAL
Masato MarumoManaging DirectorTHE CARLYLE GROUP
Masahiko IshidaGeneral Manager, Fund Investment GroupDEVELOPMENT BANKOF JAPAN
Joe ZhouFounder & Managing PartnerKEYTONE VENTURES
Nobuyuki IdeiFounder & CEOQUANTUM LEAPS CORPORATION
Tetsutaro MurakiPresident & CEOTOKYO AIM
Haruyasu AsakuraChief Operating Officer Innovation Network Corporation of Japan
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Masa YoshizawaRepresentative Director & PartnerTHE LONGREACHGROUP
Motoya KitamuraAssociate Director & Sr. Vice PresidentMACQUARIE FUNDS GROUP
Tomotaka GojiManaging PartnerTHE UNIVERSITY OF TOKYO EDGECAPITAL
Togo OkonogiManager, Investment DepartmentNIPPONKOAINSURANCE
Ashok RoyManaging DirectorDAIWA QUANTUMCAPITAL
Yoshiyuki ShibusawaDirectorJAFCO COMPANY JAPAN
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Number 8 | Volume 23 | March 2 2010 | avcj.com �
Cover picture: A Transurban toll road, now owned by CPP IB after a blockbuster M&A deal
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A dEAl hAilEd As A onCE-in-A-liFEtimE event looks about to put headline numbers against international appetite for Asian growth. The UK’s Prudential, itself only worth some $23.3 billion but already claiming to be the leading European life insurer in Asia, as it offers up to $35.5 billion for American International Group’s trophy AIA Asian network of over 320,000 agents and 23 million policies, is showing just how much Asia’s macro story is worth to corporates anxious to diversify out of their topped-out, and now struggling, Western core markets. Furthermore, Asia’s sovereign wealth funds, some already anchor investors in the Pru, are reportedly lining up to bankroll the – fully underwritten – $20 billion rights issue to support the deal. One SWF is apparently ready to take up around $5 billion of the share sale.
The rights issue doesn’t give guaranteed access to the SWFs, who will only take up the tranches that existing Pru shareholders pass on. All the same, the certainty that the SWF appetite provides clearly matters in the final resolution of the deal, and might have helped trim the fall in Pru’s stock that greeted the plan to 12%. The SWFs are reported to be eager to invest closer to their home ground after conspicuous losses in Western-directed post-crisis financial investments. Indeed, an SWF consortium was being touted as a possible rival bidder to the Pru in the runup to the deal.
Temasek Holdings, whose $5.9 billion investment in Merrill Lynch in 2008 could have lost up to $2 billion by some calculations, and the Government of Singapore Investment Corporation (GIC), which apparently also saw very uneven performance from its $18 billion of post-crisis investments into UBS and Citigroup, are both likely beneficiaries. Meanwhile, the China Investment Corporation (CIC) is a likely participant, and its $146.5 billion sister organization the National Social Security Fund (NSSF) may move on its plan to invest up to 20% of its assets overseas.
Either way, a deal likely to kick life back into Asia’s M&A market and reward underwriters Credit Suisse, HSBC, and JPMorgan Cazenove, also demonstrates the burgeoning power of Asian SWFs, backed by the same Asian growth that the Pru seeks to tap. Temasek’s $703 million triple-A-rated bond issue underlines the SWFs’ range of funding options, and deep pockets. And CIC’s recent move into secondaries with Pantheon, Lexington and Goldman Sachs, on apparently favorable special terms, shows that the SWFs are ready to use their muscle to extract concessions from GPs.
And all this comes as the California Public Employees’ Retirement System (CalPERS) faces cutting its target overall rate of return from 7.75% p.a. CalPERS itself is apparently no stranger to securing special provisions and terms from those it chooses to support. But overall, with the leading Western LPs of yesteryear in such difficulties, it’s clear that a new breed of institutions is going to dominate the private equity landscape in Asia and beyond in future. Whether these are pension funds like Canada Pension Plan Investment Board doing huge direct investment deals in Australia, or state-connected groups like CIC, these giants appear to have more cohesion, confidence and firepower than the Western investment groups of hold, and also appear ready to be more pro-active and demanding.
Private equity GPs may have to deal with these institutions as tough-minded LPs. They may have to face off with them as, at best, co-investors, or alternatively, powerful direct competitors in deals. In any case, they may simply have to live with just how far the balance of power has shifted towards these institutions post the crisis.
Paul MackintoshManaging EditorAsian Venture Capital Journal
SWFs in AIA Pru-ve power shift
AVCJ Private Equity & Venture Forum 2010
ContactAllen LeeT: +(852) 3411 4966 / 3411 4945E: [email protected]: www.avcj.com
AVCJ Private Equity & Venture Forum \ Australia & New Zealand3-5 March \ Sydney DownloaD to CalenDar
Global perspective, local opportunitiesConference series
AVCJ Private Equity & Venture Forum \ Japan21-22 April \ Tokyo DownloaD to CalenDar
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Infrastructure Finance & Development Asia \ India26-27 August \ New Delhi DownloaD to CalenDar
Number 8 | Volume 23 | March 2 2010 | avcj.com �
AIG Nan Shan deal still in the darkTaiwan’s foreign investment regulator reportedly is still facing discussions in parliament over the now-controversial $2.2 billion sale by American Insurance Group (AIG) of its local Nan Shan Insurance subsidiary to China Strategic and Primus Financial.
In October last year, the buying consortium reached an agreement to buy the highly-regarded asset. However, Taiwan’s Investment Commission did not immediately approve the deal due to concerns over possible PRC mainland-sourced funding of some of the bidders. At the time, Robert Morse, chairman and CEO of Hong Kong-based Primus and previously one of Citigroup’s top investment banking professionals in Asia, sought to assuage these concerns. The Investment Commission is now due to set up a special session with the Legislative Yuan in March, but has reportedly already said that it questions whether China Strategic is an appropriate investor for Nan Shan.
Ant Capital will sell Honma Golf to PRC groupAnt Capital Partners, the Japanese private equity firm, and Milestone Turnaround Management, a Japanese business consulting firm specializing in turnaround situations, will jointly sell their more than 50% stake in Honma Golf Co., a privately-held golf equipment maker based in Tokyo, to Marion Holdings, a PRC-invested group.
Financial details were not disclosed. The new shareholder has been invested by Crest Group, a Beijing-based investment entity. Since its establishment in 1959, Homma Golf grew by developing golf clubs and related equipment. However, its recent continuously falling sales ended in a filing for bankruptcy protection in 2005.
The company completed court-led rehabilitation proceedings the following year. The company will now seek to expand through its ties with Marion’s shareholders.
Bain may sell Outback Steakhouse in Korea, elsewhereBain Capital is reportedly in talks to sell the successful Asia Pacific operations of its investee company, Australian-themed restaurant chain Outback Steakhouse, with the sale of the Korean assets most advanced.
Around 10 strategic and financial bidders, including some private equity firms, are reportedly seeking the chain’s 100 Korean
outlets out of 118 in total in Asia, in a process managed by Goldman Sachs. Further sales of Hong Kong and Japanese franchises are also apparently in prospect.
Bain originally bought the Outback Steakhouse chain in November 2006 for some $3.2 billion, in partnership with Catterton Partners. The sale could yield some $200-300 million to help revitalize the parent group.
Hathway Cable IPO disappoints for ChrysCapital, MSChrysCapital Management and Morgan Stanley investee Hathway Cable and Datacom Ltd. fell below its listing price by up to 9% on its debut on India’s National Stock Exchange, though the result was still moderately positive for the backers.
ChrysCapital shed some of its 13.3% pre-IPO stake in the business at IPO, ending with 6.4% and a 48% return on its original May 2007 investment, while Morgan Stanley took down its stake from 3.8% to
2.9% for a 13% return. Total proceeds for the private equity investors were some $30 million. Though short of its $815 million target valuation, Hathway Cable still achieved a total market cap of around $675 million, making it India’s largest cable TV player by market value. News Corporation also owns a 20% stake in the company.
Pre-IPO interest in the listing was moderate, with analysts citing recurrent quarterly net losses in the company, poor sector dynamics, several court cases still in progress, a price allowing little upside, and a flotation geared primarily towards returning money to its investors. The listing was managed by Morgan Stanley, as well as Kotak Mahindra, India Private Ltd. and UBS.
Desai quits E&Y to raise ENAM infra fundJayesh Desai, hitherto senior partner and National Director for Infrastructure, Real Estate and Government at Ernst & Young in India, is leaving E&Y to join brokerage and asset management group ENAM, where he will launch an infrastructure fund.
The new venture, under the brokerage’s ultimate owner ENAM Holdings, will reportedly focus on broad infrastructure, including sub-sectors such as education and healthcare. Target size for the fund is unconfirmed, but may be around $500 million. The new vehicle will be ENAM’s first substantial fund in the alternative asset space, where hitherto it had mainly operated as an intermediary and advisor. Desai was with E&Y for over ten years, previously serving as a VP at Coca-Cola India.
Evercore buys Neuberger placement groupUS boutique investment bank Evercore Partners has announced
Hony invests China Golden for Xian department storesPRC buyout firm Hony Capital is investing into HKSE-listed China Golden Development Holdings through a convertible bond issue, to support the company’s buildout of its department store operations in Xian.
The three target businesses in the transaction, Ginwa Saigao, Ginwa Nandajie and Ginwa Tangrenjie, were all established in 2008-09 and operate department stores and shopping malls in the historic city of Xian. China Golden has operated the Century Ginwa brand in China for some years, and the three entities’ absorption is the latest in a series of similar deals by China Golden, which is now bringing in Hony as an investor to improve its working capital and provide additional investment expertise. The investment will be made from Hony’s $1.4 billion 2008 Hony Capital Fund, and the exact amount and stake is as yet unconfirmed.
China Golden was first listed in Hong Kong in 2000 as I-Wood International Holdings, focusing primarily on wooden furniture manufacture, but has since apparently broadened its scope of business. Hony also reportedly recently invested a further $140 million into investee Changsha Zoomlion Heavy Industry, a construction machinery company.
news
Outback Steakhouse in Seoul
A Century Ginwa shopping mall in Xian
Just where and how are these funds distributed? Read all about it in AVCJ Private Equity and Venture Capital Report, the annual series of regional reports by the leading source of information on Asian private equity, venture capital and M&A.
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Asia has over $233 billion in funds under management
* as of September 30, 2009. Source: AVCJ
09 reg reports_port.indd 3 24/2/10 10:36:40
Number 8 | Volume 23 | March 2 2010 | avcj.com �
the acquisition for an undisclosed sum of the Private Funds Placement Group of $173 billion asset manager Neuberger Berman, formerly the asset management arm of Lehman Brothers.
Evercore said that the acquisition will help it broaden its asset management business and other services, while the unit expands from its London and US bases and current eight professionals across Europe and the Middle East, and possibly Asia. Evercore partnered last year with CITIC Securities to explore cross-border investment banking opportunities, especially involving China.
MGPA first fund wound upMacquarie Global Property Advisors (MGPA), the private equity real estate investment group launched by Australia’s Macquarie has wound up its debut $480 million Global Fund I, launched in 1999 targeting Europe and Asia.
The initial fund made 21 investments in 12 countries, including office space in central Tokyo and luxury apartments in Hong Kong. The fund has sold $5 billion of assets on behalf of 15 institutional clients worldwide, according to Macquarie. MGPA Global Fund I generated more than a 2x equity multiple, and delivered a gross investment level internal rate of return of 20%, according to the group. MGPA’s more unusual recent transactions include three Polish shopping malls, bought in January this year for $338 million paid from its Europe Fund III. MGPA currently manages $11 billion in assets, including development projects in its target geographies.
Providence deal with Baidu confirmedLeading TMT specialist investor Providence Equity Partners has reportedly sealed its deal with PRC
Internet search leader Baidu to invest $50 million into a Hulu-like online video service.
Baidu itself will commit around $10 million to the venture, which will provide licensed premium video content to users on an advertising-supported basis, with Yu Gong, former president and COO of China Mobile’s 12580 video unit, as CEO of the new arm. The new company will use www.qiyi.com as its domain name. Baidu will continue to be the majority owner of the new business.
Providence has also invested Hulu, which pioneered this business model in the US. “As the world’s largest Chinese language internet search company and also the dominant video search engine in China, Baidu has unmatched competitive advantages in its user base and traffic,” Jonathan Nelson, CEO of Providence, said publicly. “The new venture will provide users with a first-class viewing experience, and will work with regulators to ensure the lawful distribution of professionally produced media and entertainment content on the internet.”
Rho Ventures gets Effective in OzNew York and Palo Alto-based VC investor Rho Ventures has made a $4 million Series A investment
in Australia’s Effective Measure, a startup developer of measurement solutions for online audiences.
Effective Measure claims to provide detailed information for advertisers and other clients on more than 97 million Internet users in emerging markets, with offices in Melbourne, Dubai, Palo Alto, New York, London and Bangkok. The company cites proprietary technology able to deliver “unmatched accuracy” in measuring site traffic, as well as considerable cost savings. David Carlick, venture partner at Rho Ventures, will join Effective Measure’s board as part of the deal. “We are excited to be involved with this talented team, in this emerging set of markets,” saidCarlick. “The global online advertising business is growing rapidly, and Effective Measure is going to provide increasing validation and momentum for that growth in the markets we serve.”
Rho is currently investing from its $150 million Rho Ventures VI fund, and claims investments all over the world.
Spring Capital announces second close, dealSpring Capital Asia, the independent Greater China private equity firm formed by former
JAFCO Head of North Asia Vincent Chan, has announced a $184 million second close of its debut Spring Capital Asia Fund, plus an investment in a wind power company in Shandong Province.
Spring was sole lead investor in the first round of funding for Qingdao Wuxiao Group, a Jiaozhou-based manufacturer of wind and electricity towers, with an announced turnover of over $150 million in 2009.
With offices in Hong Kong, Shanghai and Suzhou, Spring Capital makes early stage growth capital investments into lower mid-market PRC companies, targeting cleantech, healthcare, consumer, and business services sectors, among others. The firm anticipates a final close for its fund around mid-2010, with a target of around $200 million.
Wipro chairman backs ManipalPremjiInvest, the $1 billion private equity vehicle backed by Wipro Group chairman Azim Premji, will invest some $43.3 million for a significant minority stake in Manipal Universal Education, the corporate education arm of Manipal Education and Medical Group.
PremjiInvest will join existing investors Capital International and IDFC Private Equity, who committed respectively $40 million and $30 million to the company in 2006. Proceeds will be used to fund an ambitious expansion program, including new academic facilities in Dubai and Antigua, dental education support in Malaysia, and a further 500+ training centers across India. Manipal Group, the foundation of doctor, educationalist, banker and reformer TMA Pai, has grown into a multi-armed international educational and healthcare group with both profit-driven and non-profit units.
Alibaba’s Ma plans to form fundJack Ma, founder, chairman and CEO of Alibaba.com, one of the largest B2B online marketplaces in China, and PRC celebrity netrepreneur, reportedly is planning to form a $200 million VC fund for investing in Chinese companies.
The fund will focus on Internet businesses, consumer goods and renewable energy industries. Other prominent PRC entrepreneurs reportedly linked with the fundraising plans were Shi Yuzhu, chairman of NYSE-listed Giant Interactive Group Inc., Yu Feng, founder of Target Media Holdings Ltd., Wang Yusuo, chairman of ENN Group, Shen Guojun, chairman of China Yintai Holdings Co., Ltd., and Wang Jianguo, founder of Five Star Appliance Co. Ltd.
No further details were reported but Ma is widely accepted as a potential VC supporter of rising Chinese SMEs. Since Ma founded Alibaba in 1999, he has repeatedly said that he faced difficulties getting financing from lenders for business expansion, adding that banks often refused to lend to SMEs because of lack of corporate information.
news
Vincent Chan
Jack Ma
avcj.com | March 2 2010 | Volume 23 | Number 8�
anZ meZZaninie [email protected]
AustrAliA is not whAt thE global mezzanine debt industry might consider a stand-out market. Traditionally, equity and senior debt have always reigned supreme, and convertible bonds have been considered quite a sexy debt instrument.
Gary Stead, Managing Director and Co-Founder, Shearwater Capital, explains that mezzanine suffers reputationally in Australia, which has put many off. “From an investor perspective, people tend to think of it as risky because they think, if the bank won’t [lend to the company], then the borrower must be borrowing too much, or there’s a problem. For borrowers, the view is that it’s expensive and they would rather do something else.”
But with bank lending considerably tighter – and anecdotally, lending only to those with whom they have long-standing relationships – and a dire need for restructuring on the horizon, Australian corporates may be well-advised to reconsider their relationship with mezzanine debt.
Limited familiarity with mezzanineFor a developed country, Australia’s history with mezzanine is in fact quite limited. Cameron Hillyer, Chief Financial Officer at Clearwater Capital, explains: “It’s a different market in Australia versus Europe. In Australia, you haven’t historically seen a lot of mezzanine financing.
Except for some of the larger LBOs, where mezzanine financing was used to fill out the capital structure, most structures have been fairly straightforward, with senior bank debt and equity.”
His colleague, Edward Cairns, Head of Restructuring at Clearwater, explains. “The Australian market didn’t take to mezzanine financing with anything like the gusto of the US and Europe; something which looks like sound banking practice in hindsight. With different financial dynamics, driven by their well-capitalized – and prudentially regulated – big four ‘pillar’ banks, they simply didn’t need to.”
Unlike in Europe, which has recently witnessed a setback with the ruling on IMO Car Wash [see sidebar], Cairns says there are no real red flags when it comes to an Australian view on mezzanine, “but there is a lack of familiarity with the technique.”
Of those mezzanine deals that did get done over the past few years, many were of the variety termed ‘covenant-lite’. “This gives you limited ability to enforce in a downturn,” explains Hillyer. “In the leveraged loan market as a whole, covenant-lite deals grew to almost 19% of all bank debt outstanding, from about 1% at the beginning of 2006, so it’s not surprising to have seen an aversion to this type of financing from some investors. But, it does highlight that there is a sophisticated market there, that maybe just got too hot.”
The effects of the global financial crisisAlthough Australia only saw one quarter of negative growth and never slid into a recession – unlike most of its developed counterparts – by-products of the economic crisis have shown their faces in other ways. “A number of foreign banks are exiting or scaling back in Australia,” explains Hillyer, “so the capacity to lend has been reduced, not insubstantially.”
Historically Australia has been the “land of the equity cure” he says, noting that in a difficult environment, corporate Australia raised over A$80 billion ($72 billion) in equity in 2009, and A$51 billion ($46 billion) in 2008. “That said, there is considerable refinancing risk ahead, with A$44 billion ($40 billion) due to be refinanced in 2010 and 2011, and this may result in companies looking at non-traditional forms of financing to
solve their balance sheet problems.” Stead explains that in the past,
borrowers could push the banks for larger loans, but post-crisis this is not the case. “If you can get senior debt, you probably would do [right now], but if you can’t and the alternative is equity, right now that’s an expensive option. This means there is a pool of people who have no real issues, but just can’t get access to bank debt and/or are being forced to put in more equity.”
While problems with mezzanine – and realistically, all types of loans – occurred when structures got too loose, “Now we’ve gone to a world where credit is so restrictive, many of the deals restructured need a layer of capital like mezzanine,” says Stead.
Inevitable growth for mezzanineWith opportunities for mezzanine to play an important role in
Australia: Ripe for mezzMezzanine may increase its presence in Australia, but not overnight
Working at the Car Wash
Mezzanine debt recently made headlines in the UK, with potential ramifications for restructuring across Europe, by way of the IMO Car Wash ruling. A group of mezzanine lenders attempted to oppose a scheme of arrangement for a restructuring plan that would enable senior lenders and equity shareholders to realize a debt-for-equity swap, and would leave the mezzanine lenders with virtually nothing.
One of the main arguments by the mezzanine groups was that, looking at the real value of the company, there was a realistic possibility that the value exceeded the value of the senior debt. In the end however, the High Court found that the mezzanine players “did not have a relevant economic interest” and that the value of the company presently broke well below the value of the senior debt.
IMO Car Wash in AustraliaGary Stead
Cameron Hillyer
the restructuring of Australian companies, Stead says that the list of companies who stand to benefit is potentially quite long.
“There are different classes of companies facing refinancing,” over the next few years, he says. “Real estate and infrastructure are overleveraged sectors, but private equity is another, and companies with stretched balance sheets are another. That’s quite a large group.”
Cairns believes, “We’re starting at such a relatively low base, there has to be some room there [for mezzanine to grow]. It is a strong creditors’ rights jurisdiction with the rule of law, an independent and competent judiciary; and real bench strength in professional advisors. Legally, Australia is a sophisticated jurisdiction. It would be the first place [in the region] to see an increase in activity.”
While nobody in the industry
is arguing that mezzanine will become the next big thing overnight, Clearwater is seeing new proposals in a few particular areas, including natural resources and property development.
Stead is of the opinion that some of the tainted views of mezzanine on the part of investors have subsided as banks have become more restrictive with their lending policies. “Mezzanine no doubt was part of the problem
historically,” he says, “but now is part of the solution going forward.”
“The whole market is changing in Australia,” concludes Cairns. “Historically it has been an insolvency-driven market; now it’s looking more restructuring-driven than it was before. These things take time to change, but we see an important new trend developing here – one which we at Clearwater and others like us are keen to support.”
ANZ MeZZANiNie [email protected]
Australia’s Channel Nine, an asset of PBL Media, one of Australia’s biggest mezzanine financings to date
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avcj.com | March 2 2010 | Volume 23 | Number 810
As notEd in PArt onE oF this survey last issue, a number of factors look likely to boost merger and acquisition and private equity activity in Australia and New Zealand. These include broad economic strength unsurpassed in the Western world, sound and solvent banks, and a still-plentiful supply of pension fund money, plus a credit supply-and-demand imbalance, and a slackening of last year’s torrid public equity upsurge. And to some extent, the rebound is already under way.
The metricsFirst, by way of context, there’s no argument that the aggregate value
of ANZ M&A deals slipped year-on-year between 2008 and 2009, except in the inbound segment.
But the number of transactions rose across the board.
Domestically, a total of $58.9 billion was transacted via 779 deals (604 disclosed) in 2008 (all figures USD). A year later that figure had shrunk to $38.6 billion through 1,012 (765) deals.
Outbound aggregate deal value, by comparison, was pegged at $6.9 billion in 2008, from 144 (116) transactions. And the value slippage in 2009 was more modest, down to $5.6 billion via 161 (92) transactions. On the inbound side, however, aggregate value nearly doubled – to $41.6 billion in 2009 on the strength of 382 (312) deals, compared to $25.1 billion from 270
(207) deals a year earlier. It must be noted, however,
that a brace of huge infrastructure
transactions (Canada Pension Plan Investment Board/Ontario Teachers acquisition of Transurban Group, and CPPIB’s separate buy into Macquarie Communications Infrastructure) had a heavy impact on this outcome. Other inbound investments from China, Japan and Switzerland were much smaller.
The main consensus, however, is that a turning point for M&A may have been reached, with conditions now pointing to more activity ahead.
Recent M&A: solid, if not spectacularUBS head of ANZ M&A, Anthony Sweetman, offers this perspective:
“Last year, M&A activity was completely overshadowed by the [public] equity raising activity, simply because it was so large. That said, though, if you actually look at the numbers, despite 2009 being markedly behind 2006 and 2007, these were blowout years. But [activity] remained above 2004 and 2005, which were pretty good years. In other words, it has stayed solid, if not spectacular.”
However, caution remains, given the economic dislocation seen worldwide, because clearly no economy is an island in today’s interlocked world markets. Moreover, the cheap and easy credit which
fuelled the boom times of 2006 and 2007 is unlikely to be replicated anytime soon.
Lawyer David Wenger, partner with leading Australian law firm Allens Arthur Robinson (AAR), shares Sweetman’s positive view, and in fact is even more bullish:
“While M&A activity slowed noticeably, especially in the second half of 2009, indications are that 2010 will see a rebound,” he told AVCJ. “Companies are again starting to focus on growth., and businesses which were in some form of distress have largely survived – and may now be available for sale. Banks are starting to lend again at reasonable levels, and there is a sense that those who move more quickly will
Australian market prospects: Clear roads ahead?Investment opportunities in an uneven economy: Part 2
The convergence of a robust economy, a shortage of credit and the perceived retreat in public equity markets look likely to generate M&A and private equity deals; but for different reasons.
anZ macro [email protected]
“Businesses which were in some form of distress have largely survived – and may now be available for sale.” – David Wenger
CityLink near Melbourne in Australia, operated by Transurban
Number 8 | Volume 23 | March 2 2010 | avcj.com 11
anZ macro [email protected]
be rewarded. The only significant constraint we see is the potential mismatch between buyer and seller expectations. But that gap should narrow as business conditions improve and leverage re-enters the market.”
Best betsAs to where Wenger sees the action being hottest, he says that since Australian companies have mostly not experienced the distress levels seen in most other places, key M&A opportunities are harder to discern. But he reckons that resources and infrastructure will continue to weigh significantly, along with a renewed interest in media, commercial property, mining services and retail.
Sweetman concurs on the ongoing strength in mining and resources, including the oil, gas and coal segments. But that aside, he characterizes Australian activity as patchy.
“You don’t tend to get areas that are consistently strong, even though they may look that way for a year or two. That’s due to the relatively small size of the economy and the limited number of players in most sectors,” he explains.
One promising development is the various government privatizations under way in Australia at the moment. As examples, New South Wales is privatizing some of its electricity assets, and Queensland is doing the same as regards port, toll road, forestry and – substantial – rail assets.
As well, Sweetman sees a continuation of the cross-border activity that was the main market driver over the first part of last year. That includes foreign interests looking to acquire targets in Australia, but also Australian companies’ recovering appetites to invest overseas across a range of sectors; in the US and Europe (despite economic issues there), and to a lesser extent in China/Asia. This may seem a little strange, given the much-touted shift of the global economy’s center of gravity to the region. But the simple reason is
there are fewer opportunities there for Australian companies.
“Partly that’s because mainland China is very hard to invest in unless
you’re a big company; and frankly, a lot of the PRC companies are very large by Australian standards.”
As for the rest of Asia, it’s case by case. But the bulk of Aussie investments that end up being made will likely be of the partnership/JV type, or even greenfield; but not buying existing businesses.
Private equity: marching to different drummersOn the private equity side, different conditions and drivers are in play. Andrew Thompson, national head of private equity with KPMG, sums up.
“Large private equity firms will continue to investigate large private equity opportunities,” he told AVCJ. “But the reality is that, unless exceptional opportunities come along, it’ll be very tough, due to the improving but still difficult financing conditions, and the current backdrop of taxation uncertainty.”
“The middle market, on the other hand, is characterized by returns that largely come from buying well and growing the business, and not significantly from leveraged-based, or structuring-based returns. Thus we see that segment as broadly unaffected by difficulties in the financing markets.”
“And just as clearly, a lot of GPs have been appropriately cautious after the year they had last year, where they had real worries about
their portfolio companies and refinancing risk to contend with. What we’re seeing at present, therefore, is the bears coming out of hibernation into the 2010 sun; meaning there are growing signs of increased new deal origination activity.”
Lawyer David Wenger takes a similar view:
“We see it taking some time for the pre-GFC blockbuster deals to re-emerge. So we expect middle-market deals to dominate, though some large deals may happen in the resources and property sectors.”
As to why, he also cites the current financial constraints in the Australian lending market plus the fact that while Australian corporate balance sheets are now generally stable, most companies are not sitting on significant excess cash.
The problem with these predictions, from the point of view of AVCJ data to year end 2009, is
that buyouts made up 97.6% of activity Down Under, with a total value pegged at $17.1 billion. By contrast, expansion/growth capital
deals amounted to 1.1% or $185 million, PIPE financings even less at $158.6 million, and turnaround and restructuring activity amounting to $76.8 million and so forth.
Private equity areas of opportunityAs to where activity is likely to be concentrated, consensus is that there is a growing line of private equity firms looking to divest assets, now that some calm has returned post-GFC. This is primarily due to a number of portfolio companies having achieved anticipated investment objectives, and the potential availability of an ongoing IPO exit window, combined with stronger corporate and financing confidence allowing M&A activity.
From a new private equity investment standpoint, according to Thompson, the flow will be to services enabling the fastest-growing industries. So companies providing mining services again have allure as commodity prices firm; and for very different reasons, so do those linked to enabling sustainability. Many clean/greentech businesses may benefit from ongoing stimulus and corporate sustainability strategies – and unlike many other sectors, this can only grow in future.
Additionally, Gary Stead, co-founder and managing director with Shearwater Capital in Sydney, sees the provision of credit as a very attractive space in terms of delivering risk-adjusted returns.
“For private equity, the challenge will be, while multiples have come down, what can they get in terms of leverage. The banks are still very tight on that. But you’d have to see them benefiting on the buyside, referencing again forced asset disposals.”
In other words, it’s a much-changed private equity universe in Australia, as in most other places. And a return to robust longer-term growth remains uncertain, now that the benign credit markets – and raging-bull equity markets – that drove it are in abeyance for the foreseeable future.
“What we’re seeing at present, therefore, is the bears coming out of hibernation into the 2010 sun.” – Andrew Thompson
Facilities at Broadcast Australia, one of the major holdings in CPP IB’s flagship purchase of MCIG
Unison Capital, the Japanese bUyoUt firm, will acquire a 61.3% stake in MK Capital Management, a listed real estate-related finance and asset management company, through a private placement of new shares due on April 5th this year.
MK Capital said that it needs further capital to develop its debt restructuring business, and to form new funds to accumulate distressed assets in Japan. Therefore, it decided on Unison as the best suitor, given the latter’s ostensible knowledge of management control and skills for executing business strategies to further the company’s growth.
The total amount paid for the majority stake in the company will be JPY2.5 billion ($27.7 million), to be paid from the Unison Capital I, II and Unison Capital Partners III funds. Ichirota Kato, CEO of MK Capital, will reduce his stake from 26.7% to 10.3 %, but MK will remain listed on the Tokyo Stock Exchange’s Mothers growth board.
MK Capital Management was founded in 2001 by Kato, a former director of Davinci Holdings, one of the largest property investors in Japan. The company is engaged in asset management business that involves the acquisition of real estate assets through special investment vehicles, and asset incubation by developing purchased property assets with its
own capital and selling after it has increased their value. It also has strengths in distressed asset management. Other business lines include provision of mezzanine loans, financial advisory services and real estate brokerage services.
In Japan, about JPY3.5 trillion ($39 billion) of mortgage securities will be converted between 2009 and 2013, and some of them will very likely fail to repay, and will become distressed assets. The value of the total real estate distressed asset pool in Japan is estimated at around JPY125 billion ($1.4 billion) in total, presenting a vast market for investors who target distressed space.
However, questions surround the MK Capital deal. One LP source told AVCJ, “I am not sure that the LPs in Unison’s operating funds have agreed on this acquisition, and I feel I should question why they took a majority position in this business, given its previous investment track record.” Other sources indicated that Unison has been consistently interested in real estate and financing, adding that the distressed asset market is very attractive.
In 2005, Unison took a 61.7% stake in Cosmos Initia, an apartment and residential house developer, from its parent Recruit Co., but the company later applied for Japan’s Alternative Dispute Resolution bankruptcy workout mechanism in April 2009. However, Unison, which has developed special tactics for rebuilding troubled companies, was said to have secured its investment amount in Cosmos Initia by selling off its stake in 100%-owned Cosmos Life, the property service management
unit of the parent, acquired in January 2009, to Daiwa House Industry, an Osaka-based property developer, before Cosmos collapsed. It is too early to say if similar plans are in train at MK Capital.
Indeed, MK Capital sees the current environment in real estate industry as a good time for its investors to help strengthen the debt restructuring business that it started to operate last year, given the current pricing gaps between sellers and buyers, which are thwarting closes. Accelerating the restructuring of the property asset management operations would be also key to the company’s further growth, MK Capital said, adding that it has already acquired a considerable inventory of deals in this space. It will primarily focus on JPY1-5 billion ($11-56 million) deals for commercial, office and rental residential buildings in large cities, such as Tokyo, Osaka and Nagoya.
As a controlling shareholder, Unison will send three external board directors and one external auditor to MK Capital.
deals of the [email protected]
Unison Capital to acquire MK for real estateControl stake in restructuring/asset business
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An MK Capital-incubated asset in Shimokitazawa, Tokyo
Ichirota Kato
Number 8 | Volume 23 | March 2 2010 | avcj.com 1�
Fundraising [email protected]
Q: Please outline some of the new fund’s characteristics.
A: This is our first private equity direct investment fund, mostly focusing on offshore growth capital opportunities, mainly equity investments with structured downside protections. This is an offshore fund, and our target will be focused on China opportunities. The main exit will be via IPO listings in offshore stock exchanges, and we expect that the potential investee companies would be listed in the next 12-24 months. The majority will be Hong Kong-listed.
The fund size will be around $250 million to $500 million; it depends on the final fundraising results. After the first closing, several fundraising agents have already been interested in contacting us. After the initial talks with potential investors, we have seen quite a few potential investors in Asia as well as the US and Europe. We are expecting the majority of the fund will be raised out of Hong Kong and Asia. One third will be from the US and Europe
This is a fund run under the bigger platform of Bank of Communications, which is one of the top five banks of China. We have a very extensive network in China, reaching out all over China. We have first-hand knowledge of those growing companies in China. This forms a very good sourcing platform for this fund.
This is the first fund from BOCOM International, so all the resources of BOCOM will be used to support this fund, in terms of originating deals, execution, and providing various products to our investee companies. We have a lot of advantages over foreign direct investment funds, who do not have an onshore vehicle, or any platform to help their investees on top of the funds they have invested. Compared with other onshore Chinese direct investment funds, we also have this very unique bank system, providing different products. A majority of Chinese enterprises want to be allied with the BOCOM brand and to be able to leverage on BOCOM’s platform.
Q: What were the key reasons for deciding to form an offshore vehicle, as opposed to one of the RMB fund structures?
A: RMB and offshore funds are very different. This fund is a natural development after our years of development of our investment banking business. Now we can provide our clients with underwriting, bridge loan products, to companies that are targeting to get listed in Hong Kong and offshore. In the past few years, we have been supporting these clients.
We see it’s a good time to set up an offshore fund to help grow the overall business
of investment banking. Also, with this BOCOM and BOCOM International structure, we could capture a lot of returns for our investors. In terms of RMB funds and fund management, BOCOM International has a plan, but it will be the next step.
On the Chinese stock exchanges, there are a lot of listings, and a lot of policies are changing. It’s very uncertain. Once you get invested into an A-share-listed company, the lockup will be three years. A lot of things are very uncertain. Although it’s very hot, we will wait and see the results of these funds, but sooner or later we will consider that.
Q: How significant is BOCOM’s financial role as an anchor investor in the fund?
A: For the first closing, we got the investment of $52 million. Half of it was from BOCOM international. Basically, it’s about 5-10% of the fund. It’s quite a big commitment. And the other investors, some are the funds from the management team, some are the funds from international investors.
Q: How important is it that BOCOM is Shanghai-headquartered and is at the center of the new legal developments in China?
A: There are two sides of this: one is offshore, the other is the policies and regulations.
Q: Do you have strong preferences for sector focus, or are you pretty much open?
A: We are more focused on the growing consumer sectors in China. Over the past couple of years Chinese GDP was driven basically by investment, and the central government realized it’s more important to help Chinese people to spend, and to grow the consumer sectors in China. There are a lot of opportunities in the consumer sectors.
We will look more specifically into the healthcare sectors, the green energy sector, infrastructure, high-speed railways and other rapidly-growing consumer-related sectors.
Q: Are you getting signs of really strong interest from international LPs?
A: We don’t think it’s a very difficult task to do this fundraising. Some of the US investors asked us to make the fund size larger. We’re saying that we’ll see.
Q: Do you have many opportunities you are ready to invest in from Day One?
A: We have 5 to 10 solid investment opportunities. Some of them we already secured by our principal money. Some of them we are talking to very closely now, and if the fund is set up in time we’ll use fund money: if not, we’ll use principal money. So it’s not like we are not ready on Day One and don’t have investments.
Fundraising Q&A: Simon Hua, BOCOM InternationalSimon Hua, Managing Director and Head of Private Equity at BOCOM International Asset Management, a subsidiary of China’s Bank of Communications, speaks about the group’s new offshore fund.
avcj.com | March 2 2010 | Volume 23 | Number 814
thE CArlylE grouP hAs signed a strategic partnership agreement with Fosun Group, the largest privately-owned investment conglomerate in China, to enhance their investment activities in the Greater China market. Both firms will jointly sponsor and manage an RMB fund for investments into high-growth PRC companies. The new JV fund has already had $100 million injected by Carlyle and Fosun, and both firms plan to make immediate investments. Aside from the fund’s initial capital, both companies will look for co-investment opportunities with their existing funds. Through partnership with a large local conglomerate, the fund will ostensibly have easier access to local investors, with immediate benefits for further fundraising activities.
This global strategic alliance between Carlyle and Fosun as well as the JV RMB fund will be led by Wayne Tsou, Managing Director and Head of Carlyle Asia Growth Partners, who previously worked with Warburg Pincus.
Fosun’s pedigreeThe counterparty of this alliance, Fosun Group, was founded in 1994 by four university graduates from Fudan University, including Guo Guangchang, the current Chairman
and CEO of Fosun, Liang Xinjun, Wang Qunbin and Fan Wei. Five years after its formation, Fosun’s founding members started selling and buying property, enabling the company to buy state-owned enterprises in China. As its strategies thrived, the group established Fosun International in 2004 and listed the company on the Hong Kong Stock Exchange. Fosun has invested in various industries that benefit from China’s rapid growth, including pharmaceuticals, property development, steel, mining, retail and services, with its total value of assets under management exceeding $10 billion. One of its subsidiaries, SinoPharm Holdings, the most recent IPO from Fosun’s past investments, recently delivered a claimed IRR in excess of 100%.
This is not the first time that Carlyle has partnered with a Chinese corporate giant in the mainland, where many companies have been seeking private equity or VC capital rather than taking the longer route of applying for funds from lenders. Prior to this alliance, the two firms had already made a joint investment in Guangdong Yashili Group Co., Ltd., one of China’s largest infant formula companies, in September last year.
Carlyle’s positionAVCJ asked Wayne Tsou about the significance of this JV, and he replied: “Partnering up with a large private company in China means that it is time for China to globalize, with corporates in general aspiring to be global firms when looking at
the maturity of private companies,” adding that bringing together best practice from East and West would allow both parties to be more competitive globally.
The new JV will expect to raise a reasonable size fund without rushing it. However, Tsou said that the joint entity plans to make five investments from its initial $100 million. The fund is open to all sectors, but the JV will look at the growth rate, leadership, market share and possible potential of the company when determining which investments to make.
Mutual synergies of industry knowledge and investment strategies from both firms will further buttress the JV’s strong potential for building strong networks and deal sourcing, according to Carlyle. Furthermore, the partnership of two well-known brands will likely lure local LPs’ attention for further fundraising.
Funds and fundraising in the PRCAccording to AVCJ Research’s latest figures, just over $5.4 billion of private equity and VC funds were raised for China in 2009, compared to over $14.4 billion – the highest
total ever – during 2008.“Competition has been
increased with the hundreds of local private equity firms who raised funds last year,” Tsou said, adding that there is a lack of professional well-managed platforms that are properly institutionalized. This is a commonly-heard complaint from experienced private equity players in China lately.
One non-Chinese Asian fund manager told AVCJ that it was quite surprising how much RMB capital Chinese institutions could raise for their private equity funds. Another mainland private equity player remarked that there are many new LPs expecting to invest into private equity in China.
Meanwhile, there was not a single case of overlap during the past ten years between Carlyle and Fosun, because the China market is so big, said Tsou. Consequently, the JV could increase the numbers of
deals there, he added.It should be noticed
that Fosun has strong support from the Shanghai government, which should help deal closing and other administrative issues. PRC institutions and other incomers generally require strong local government connections to thrive.
“When in Rome, do as the Romans do.” A fundamental key for laying a strong foundation in China is to follow their business rules and bed down into the local culture, while keeping foreign firms’ sophistication.
David M. Rubenstein, Carlyle Co-founder and Managing
Director, said of the deal, “China is one of the best places in the world to invest. We expect to make investments that benefit high-growth companies and enhance the local private equity industry.”
Carlyle partners with Fosun for JV, RMB fundCo-investment, access advantages
Guo Guangchang, Chairman, Fosun International
Wayne Tsou
Fundraising [email protected]
Number 8 | Volume 23 | March 2 2010 | avcj.com 1�
INDUSTRY Q&A | [email protected]
At the end of 2009, there seemed to be a growing interest – and wcertainly growing hype – about private equity potential in Vietnam. However, it’s been fairly quiet so far this year. Why is that?My view is that Indonesia and Vietnam seem to be the natural diversity markets for anyone feeling heavy on China and India. In the fourth quarter of last year, there was not necessarily a strong feeling toward which one; it was more, how do we play this? Resources being what they are now, and the fact that both markets require a fair bit of effort, research and studying, means that one was chosen.
I don’t think it’s that anyone made a conscious decision, but clearly if those are the two natural options for diversification, Indonesia has stepped out in terms of attracting capital as we’ve come into 2010.
Looking at the draw of a market like China, wouldn’t you argue that with so much competition, it would be worth investing in a less crowded market like Vietnam, where the valuations are still reasonable?I had a meeting recently with a significant LP who is currently considering third and fourth tier cities over Vietnam. The coastline of China is where everyone already is, but as the more popular areas of the country becomes too competitive, and you have to go into the hinterland to find value,
does it not just make more sense to look south?
In fact, there has been [research put out on this recently] based on wages. The view has been that there is wage inflation occurring along the coastline of China, and therefore were you not better to look at Vietnam? Particularly if the main issues were infrastructure, then infrastructure in more remote areas of China is no better.
And how do LPs view the market currently?We have been in the market fundraising for some time and we’ve been happy to take our time. We appreciate that we’re looking at a new space in private equity with Vietnam. We also appreciate that there needs to be a lot of education in the traditional LP community. We’ve been in Vietnam for 16 years, so if it takes more time to do it right, then we’re okay with that.
We’re starting to get passed the education mode, though there are some that are still in that stage. Some LPs have made investments, and some would like to take a longer, harder look and are turning the corner for dedicating the time to do the due diligence to make an informed decision. Now, that list is relatively small, but those LPs are also very savvy.
It would be great for us and for Vietnam to see them move ahead; we would like to be investing and have deals on our desk to execute on.
Is there a prevailing personality of those who have invested in Vietnam?We are generally seeing large, accomplished LPs coming out of either fund-of-funds, sovereign wealth funds, or the direct institutional investment world. Interest from corporate pension funds seems to be increasing as well. Groups like endowments in the US have committed to fund-of-funds in Asia and thus their capital is allocated through [that channel].
Their mentality does vary, though. Some [LPs] want a better trodden path before looking at Vietnam; some want to get into Vietnam before the path is determined, because at that point it gets expensive.
What are the most common misconceptions still hindering LP investment?People don’t realize the disconnect between what you read and what’s really going on in the country. You have to land in the country before you realize how dynamic the economy is.
One of the things people say over and over after visiting Vietnam is, “We had heard about the entrepreneurialism and the fast-paced society, but we had to see it to understand it.”
Private consumption is two-thirds of GDP and 60% of the population is under 30 years
old. The people here are highly entrepreneurial, highly motivated and very excited about the opportunities that lie ahead for them and for the country.
Still, one has to look through those numbers to find the reality. You need to weigh where the money is going and what it means for the domestic economy. For instance, the number we track is dispersed FDI, and that is growing at a healthy rate such that it was above 10% of GDP for 2009. The published number is same for 2010.
Then where are the opportunities for private equity investing in Vietnam?With Vietnam being the small market, one is required to take a broad view when formulating an investment mandate. One thing we’ve done is focus on the domestic economy [in two parts]. One is on private sector development, and the other is a renewed effort toward the privatization of state-owned enterprises.
We have deals on our desk that we’d like to execute on right now.
Industry Q&A: Andrew Legge, Dragon Capital
Christina Kautzky speaks with Andrew Legge, Director, Dragon Capital, about why Vietnam is off to a slow start this year, how LPs view the market, and where private equity opportunities lie. An article looking in-depth at Vietnam and the private equity firms in operation there will appear in next week’s AVCJ.
Modern Ho Chi Minh City
avcj.com | March 2 2010 | Volume 23 | Number 816
PRIVATE EQUITY DATA FILE | aVcJ research
PriVAtE Equity in AsiA
Investment Breakdown by Country From January 1 to February 28 2010Investee Country Amt. Invested US$mln No. of Deals (Disc.) No. of Investees
India 689.97 17 17 17
China (PRC) 657.00 29 21 29
Indonesia 616.32 1 1 1
Australia 360.34 7 7 7
Hong Kong 142.37 4 4 4
Japan 81.06 8 7 8
Singapore 41.85 3 3 3
Malaysia 30.00 3 1 3
CLOSED FUND
Location: New Zealand
Fund Name: Direct Capital IV
Closing Amount (m): NZ$325 (final close)
Launch Date: Nov-2008
Fund Manager/Advisor: Direct Capital
Stage Focus: Buy-outs (MBO/MBI/LBO), Expansion/Growth Capital, Mezzanine/Pre-IPO
Industry Focus: Agriculture/Fisheries, Computer related, Conglomerates, Construction, Con-sumer products/services, Ecology, Electronics, Financial services, Information technology, Infrastructure, Leisure/Entertainment, Manufacturing –Heavy, Manufacturing-light, Media, Medical, Mining and metals, Public Administra-tion, Retail/Wholesale, Services - Non-financial, Telecommunications, Textiles and clothing, Transportation/Distribution, Travel/Hospitality, Utilities
Geographical Focus: Australia, New Zealand
Contact: Ross George
Phone: (64) 9-307-2562
Email: [email protected]
Website: www.directcapital.co.nz
Update: Direct Capital Private Equity has successfully completed raising Direct Capi-tal IV at NZ$325 million, including NZ$75 million in over-subscriptions above its target of NZ$250 million. The fund is focusing on mid-market expansion and management buyout investments in New Zealand and Australia. Existing investors in Direct Capital III re-committing to Direct Capital IV on average more than doubled their commitment levels and its cornerstone investor, the New Zealand Superannuation Fund increased its commitment by two and a half times. Direct Capital also attracted 16 new investors.
Location: China (PRC)
Fund Name: CITIC Capital China Partners II
Closing Amount (m): US$925 (final close)
Launch Date: July-2008
Fund Manager/Advisor: CITIC Capital Partners
Stage Focus: Buy-outs (MBO/MBI/LBO), Privatization
Industry Focus: Agriculture/Fisheries, Computer related, Conglomerates, Construction, Con-sumer products/services, Ecology, Electronics, Financial services, Information technology, Infrastructure, Leisure/Entertainment, Manufacturing –Heavy, Manufacturing-light, Media, Medical, Mining and metals, Services - Non-fi-nancial, Telecommunications, Textiles and clothing, Transportation/Distribu-tion, Travel/Hospitality, Utilities
Geographical Focus: China (PRC)
Contact: Brian Doyle
Phone: (86) 21-6170-5512
Email: [email protected]
Website: www.citiccapital.com
Update: CITIC Capital has held a final close on US$925 million for its second private equity fund CITIC Capital China Partners II. The new fund will make buyout and privatization investments in well-established Chinese companies.
NEW FUNDS
Location: China (PRC)
Fund Name: Everbright Jiangyin New Energy (Low Carbon) Industry Investment Fund
Target Amount (m): RMB 3,000
Launch Date: Feb-2010
Fund Manager/Advisor: CEL Venture Capital
Stage Focus: No Preference
Industry Focus: Utilities – Renewable energy
Geographical Focus: China (PRC)
Contact: Ling He
Phone: (86) 755-8302-6750
Email: [email protected]
Website: www.everbright165.com
Update: CEL Venture Capital, a wholly-owned firm of China Everbright, and four local enterprises from Jiangyin city in China’s Jiangsu province plan a RMB 3 billion RMB-denominated fund that will focus on new energy projects and resources. The investment period for the fund will be four years and Everbright Jiangyin New Energy (Low Carbon) Industry Investment Fund has raised RMB 1 billion in the first phase.
Location: China (PRC)
Fund Name: Carlyle-Fosun RMB Fund
Target Amount (m): NA
Launch Date: Feb-2010
Fund Manager/Advisor: Carlyle Asia
Stage Focus: No Preference
Industry Focus: No Preference
Geographical Focus: China (PRC)
Contact: Wayne Tsou
Phone: (852) 2878-7000
Email: [email protected]
Website: www.carlyle.com
Update: Carlyle established a strategic relationship with Fosun Group to launch a RMB-denominated fund that will invest in high growth Chinese companies. With initial investment of $100 million from Car-lyle’s Asia Growth Fund and Fosun, the co-branded RMB fund will be able to immediately invest.
Fund-rAising monitor