Inside this IssueRavi Thakran embarks on a new chapter

Singapore becomes top investor inVietnam

L Catterton hires TPG veteran

Yuka Hata joins JIC

Wavemaker raises $111m for third early stage fund

LPs from first fund re-ups with Archipela-go

SVCAQuarterly JULY 2020ISSUE 4

FOREWORDThe spread of COVID-19 in 2Q of 2020 has further strained healthcare, hurt businesses, crippled travel (and fundraising!), robbed jobs, reversing globalisation whilst raising geopolitical tensions as global economies stumble into recession.

In July, Singapore entered into technical recession. Temasek Holdings and GIC, Asia’s leading sovereign wealth funds, have reported lower returns, or losses. In USD terms, Temasek showed a 7% loss, while GIC’s portfolio return - over a 20-year period up to 31 March 2020 - was 4.6%, below 5.7% as at 31 March 2009.

In the investment report, GIC outlined a sustainable investment framework to go on the offensive by integrating sustainability factors into investments, look at thematic opportunities arising from climate change and regularly screen portfolios for ESG issues. GIC will play defensive by conducting due diligence for companies at greater sustainability risks and support climate related financial disclosures. GIC also pledges to procure, consume sustainably and responsibly, while it aims to become carbon neutral in their operations.

As an industry association, we aim to steer our members toward desired goals set by institutional investors. A crisis like this can be a conduit to positive change.

“COVID-19 may be the biggest instigator to innovation. Our forced experiments into new ways of learning, living, playing and working will translate into great opportunities for PE and VC in the years to come,” Doris Yee, director of SVCA shares.

In the months ahead, we will continue to host dialogues with personalities who are taking action to make positive transformation whilst we adjust to new ways of communicating and engaging, with safety as a top priority. Finally, please submit by 7 August your nominations for:

Deal of the YearExit of the YearFundraise of the YearESG Award of Distinction

Stay tuned,Sharon LimDirector of ContentSVCA

SVCA Quarterly: Foreword Page 2

Content

3 ESG Event report

4 Ravi Thakran on Asia 3.0

7 People news

8 Archipelago LPs return

9 Deal news

11 Ardian jumbo fund

12 Fund news

13 Market Insights on Fundraising

15 Funds Table

While we regret that our biennial conference SVCA 20/20 will be postponed to next year, we intend to intensify our engagement through more webinars, roundtables and discussions on how we may help our members in all aspects of your business: from fundraising to ESG adoption to simply expanding your networks.

Performance Standards are principle-based and not prescriptive.

While Performance Standards are wide ranging involving issues of labour, resource efficiency, community, land resettlement, biodiversity, indigenous people and cultural heritage, each investment should be accessed and monitored on its own merits focusing on issues that are more relevant and material.

E&S Management is not about filling in templates but includes a comprehensive framework comprising an E&S policy, procedures (for investment screening, risk categorization, due diligence), requirements for approval, supervision, capacity building for fund managers, communications mechanisms to stakeholders, reporting, monitoring and review.

Incorporating E&S management into the investment process can be implemented in incremental steps. Internal capacity can be augmented through the hiring of external experts and consultants.

Key metrics for monitoring and improvement should be driven by investment objectives and agreed among stakeholders.

SVCA Quarterly: ESG Event report Page 3

ESGWebinar

On 7 July, SVCA organised a webinar: Understanding & Applying ESG Performance Standards where Galina Ermakova, Regional E&S Lead for Investment Projects shared IFC’s approach to E&S Risk Management for Fund Managers. A lively and interactive panel discussion followed with representatives from SVCA members, Navis and Heritas, sharing their own ESG journeys. Lymon moderated the panel session.

Key Takeaways

Ravi Thakran is a name closely associated with LVMH, where he has spent the last twenty years of his career, during which time he also founded L Capital Asia in 2008. L Capital went on the become the largest consumer focused growth investor in the region before it caught the attention of Catterton which acquired a majority stake in L Capital in 2016.

In May, Ravi resigned as managing partner of L Catterton Asia, but will continue to manage the investments in the maiden $637 million L Capital Asia fund. During his tenure in the past decade, Ravi has invested in 35 brands in Asia, five of which have surpassed USD 1 billion in revenues.

His maiden investment in a multi brand skincare company, Guangdong Marubi, is listed on the Shanghai Stock Exchange with a market capitalisation of over $4.8bn. In Singapore, Ravi led investments in Sincere Watches and Charles & Keith, both of which delivered more than 3X return to the fund.

When he wasn’t enrolled in school for the first twelve years of his life, Ravi spent his time with cousins herding buffaloes, catching snakes and climbing trees in the village.

His parents finally sent their firstborn child to school later than most, paving the way for the son of the soil to start crawling up to build a career beyond farming.

He went to obtain a veterinary science first degree. “It was an obvious choice when I grow up with animals in a rural farming community” Ravi explains, adding how his early years shaped his work ethics, “my parents taught me an important lesson in the dignity of labour.”

Instead of remaining in rural India as a vet, Ravi pursued business studies which led to his MBA from Indian Institute of Management (IIM) Ahmedabad.

SVCA Quarterly: Ravi Thakran on Asia 3.0 Page 4

One on One with Ravi Thakran

DevelopingAsia 3.0

At LVMH, Ravi has been head of watches and jewellery and Sephora in Asia, and made group president of south and southeast Asia and middle east in 2008. Today, Ravi continues to be group chairman of LVMH South and southeast Asia and Australia and New Zealand. Before LVMH, Ravi worked at Nike, Swatch and Tata Group, brands known to many but perhaps unlikely destinations for a Jat - a farming class - who originated from rural Delhi.

Ravi went on to join Tata Group which sent him on his first overseas assignment with Titan Watches, which he hails as the “best retail brand from India in 1988 and today”.

That started his journey of building brands. From Titan, Ravi went on to Swatch Group which brought him to Singapore where he embarked on his longest tenure with LVMH, which Ravi describes as the largest investor of consumer brands. The LVMH experience has also shaped Ravi’s belief in taking a strong minority stake in consumer businesses.

Rooted in Indian Soil

Branding journey

“Most Asian countries were colonies of Western powers till middle of last century. Our countries took decades in finding their feet and started to emerge from 80’s onwards. Hence I call the 80s and 90‘s as Asia 1.0, wherein Asia became the factory of the world for mass consumption goods, eg Nike, Adidas, Gap and Levi’s jeans.

As a result, its middle class expanded from 500 million to 1 billion. The one market that preceded Asia 1.0 was Japan, and the other Asian tigers: Taiwan, Hong Kong, Singapore and South Korea.

However, Japan continues to be a unique consumer market in a league of its own, having produced well known brands like Seiko, Toyota, Citizen and Nintendo (Game Watch).”

“Then came Asia 2.0 with the onset of the millennium. In the 2000’s China led the emerging markets in Asia and the middle east to build world class ports, roads, airports, airlines, and demonstrated manufacturing prowess by building vertically integrated manufacturing and global supply chains.

It also invested in cutting edge technology and instead of borrowing 2G and 3G from the west, Asia built its own advanced 4G and 5G technology. China emerged the second largest global economy and brought hundreds of millions out into middle class, doubling this population to 2 billion.”

“I believe we are now entering into Asia 3.0, marking Asia’s maturity. In the next two decades, we will see the largest economic expansion in the history and the middle class population in Asia will leap to 3.5 billion. Notwithstanding the temporary blip in the journey from this pandemic, Asia is set to build world class brands across categories.”

Journey Toward Asia 3.0

SVCA Quarterly: Ravi Thakran on Asia 3.0 Page 5

“In Asia, founder-led companies, helped by PE, will do better. In fact, I’d even say that founder-led companies globally will do better than brands that have been 100% sold to a financial investor. In Asia too, there are many first-generation entrepreneurs like Charles (in Charles and Keith) we can give wings to their dreams, while they retain control, and therefore remain incentivised to grow their businesses.”

Ravi is set to build a new platform to turbocharge Asia 3.0 to help entrepreneurs build superlative brands across a wide spectrum of categories. This is the time for homegrown brands to fly. Ravi hopes to apply L Capital’s original thesis and focus to invest in the 3 As: brands that are aspirational, affordable and alternative.

With Asia now at par with the West on technology and with better inter-connectivity, entrepreneurs have to become digitally savvy, Ravi believes. Brands that embrace big data, omni-channels, superlative digital engagement with consumers will emerge winners.

SVCA Quarterly: Ravi Thakran on Asia 3.0 Page 6

New leaders would emerge from pure digital and digitally-native arenas as well.

As important as it is to build digitally savvy brands, “we will integrate ESG into our investment thesis by looking at alternative businesses for example, preventive measures at a time when investments are concentrated in curative treatments. We will look at healing, restorative food ingredients found across Asia, from turmeric, oud, Aryuvedic treatments, TCM, Korean ginseng to Manuka honey.”-

Ravi hopes to build brands, which he feels are still playing catch up with more established multi- generational Western brands which have reached a certain level of perfectionism and hence, finesse, helped in large by the narratives built over time, eg Swiss watches versus Seiko. “Seiko has illustrious history and produces superlative world class products on par with best Swiss brands but its overall brand narrative and marketing have much room for improvement,” Ravi shared.

"Asians have much to be proud of our heritage and history. We have to learn from the best on innovation and creativity and undying focus on delivering high quality and maintaining desirability for the brands we build.

The day Asia learns to build brands to rival their Western counterparts is when we take our rightful place on the global stage.”

At a time when the world is embroiled in an unprecedented crisis exacerbated by geopolitical conflicts and hate politics, the quest to build homegrown Asian consumer brands and confidence will differentiate the consumer-focused investment thesis Ravi hopes to build in the next chapter of his investment career. Talks are underway with private equity firms which have approached Ravi who is exploring and reviewing his options to build the most optimal structure to put his Asia 3.0 investment thesis into action.

Wooing Asian middle class

Building Asian brands and confidence

L Catterton hires TPG veteran

L Catterton has hired Scott Chen, a partner and managing director of TPG to co-lead its Asian operations. Scott was head of TPG Beijing office.

Scott, who joined TPG in 2001, has been based in Singapore and Hong Kong before Beijing. His focus lies in healthcare and consumer/retail industries.

Scott’s appointment comes on the heels of a number of senior level departures from L Catterton including Harry Markl, a managing director, and Frank Zhao in May, at the same time as Ravi Thakran, who launched L Capital Asia before it was merged into L Catterton Asia in 2016.

Softbank cutting 15% of staffSoftbank Group’s $100 billion Vision Fund is shedding 15% of its staff following aggressive bets on startups that wiped $16.7 billion off its value, according to a Nikkei report.

SoftBank will see, for the first time since 2016, cuts to its 500 or so employees. The cuts mirror layoffs at startups which are trying to mitigate losses.

Yuka Hata joinsJapan Investment Corp

Yuka Hata has joined Japan Investment Corporation in July, as a managing director and head of fund investments from Nissay Asset Management where she was co-head of private equity.

Yuka was at the Nippon Life Insurance subsidiary for four years, prior to which she was working across Nomura entities from 2007-2016. In her new role at JIC, Yuka will report to Toshiyuki Kumura, who was appointed CIO and board member at JIC in November last year, after a long (1983-2019)，illustrious career at Tokyo Marine & Fire Insurance.

SVCA Quarterly: People news Page 7

Jeremiah Tay leavesAffirma for family office

Jeremiah Tay has resigned from Affirma Capital and will be joining a Singapore-based family office as co-head of private equity from October. Jeremiah had been at Affirma and its predecessor Standard Chartered Private Equity (SCPE) for the past decade, climbing the ranks from Associate to Executive Director since August 2019. He started his investing career in SCPE India in 2011 and was involved in SCPE's investments into Prime Focus, Inox India, and Fortis Healthcare.

He returned to Singapore to re-join the Southeast Asia team in 2013 and led the exits from Thai Union Frozen and Wellard Group Holdings. He played a lead role in the investments into Crystal Jade in 2015, Phoon Huat in 2016 and the privatization of Tat Hong in 2018.

People News

The return of existing LPs to re-up with Archipelago Capital Partners helped the Southeast Asia focused GP reach a first close in the midst of a pandemic. CEO Jovasky Pang told SVCA the data room was set up in January, and the fund achieved a first close in May on $100 million.

IFC made a $25m commitment toward the second fund which has a $250m target. Amongst the LPs who have committed to the $75m maiden fund are Pavilion Capital, Sofina, Hanwha and NH - or Nonghyup, National Agricultural Cooperative Federation.

A first investment from the new fund has been made into CoolBlog, a kiosk-based dessert and beverage brand from Malaysia, Jovasky shared, explaining that for every investment, Archipelago has a practice to follow the business for at least a year before it makes the final commitment. Another risk mitigator is investing into established businesses averaging 40 years in operations, albeit the latest investment is the youngest business in the portfolio, at 12 years old.

The COVID-19 is a crisis which tests the resilience of businesses. Investments by Archipelago Capital have to pass three levels of resilience tests, from the sector level, to being a proven business model and finally, on balance sheet, Jovasky explained.

Jovasky recalls his personal experience managing Bank Danomon in Indonesia in 2004 during when a number of crises converged: the first presidential election, a tsunami on Boxing Day claiming the lives

of 46 employees, and three terrorist bombings - all within the first year at the Temasek-acquired bank that was just recovering from the aftermath of the Asian financial crisis. Jovasky joined Temasek in 2004, and was seconded to Bank Danamon immediately after.

While Covid-19 has negatively impacted economies and businesses, causing massive layoffs at startups, if not shutting them down, the portfolio companies of Archipelago have managed to escape the pandemic largely unscathed.

SVCA Quarterly: Archipelago LPs return Page 8

LPs re-up for Fund II

In Conversation with Archipelago Capital

Archipelago invests in three sectors, areas where the firm’s partners have had operational and consulting experience - financial services, consumer and niche industrials, where a business correlates with consumption growth.

Jovasky expects a final close on Fund II at the end of 2020, and to open a new office in Philippines this year to boost the GP’s Southeast Asia presence in Singapore and Jakarta. Archipelago invested in a 15% stake in One Network Bank, the rural banking arm of BDO Unibank, Philippines largest lender.

“All the portfolio companies were offering essential services, so none were shut down by the lockdowns,” Jovasky said.

Temasek Holdings is trailing GIC into Vietnam, as Singapore becomes the top foreign investor in the Southeast Asian country many believe will benefit from factories leaving China amidst persistent geopolitical tensions.

In the first four months of 2020, Singapore invested $5.07 billion into Vietnam, representing 41% of total foreign investment, according to Vietnam Investment Review quoting Vietnam’s Ministry of Planning and Investment’s Foreign Investment Agency (FIA). It was followed by Thailand and Japan, with $1.46bn and $1.16bn, respectively.

Hanoi-based residential developer Vinhomes is selling a six percent stake in the company to a KKR-led consortium which includes Temasek for $650 million. KKR is making the investment from Asia Fund III.

Vinhomes is a subsidiary of Vietnam’s largest private enterprise, Vingroup, which Singapore’s GIC invested $1.3billion into in 2018. GIC’s direct investment into Vingroup and related entities was followed up last year with a $500m investment, this time via a GIC-led consortium, into Vietnam’s consumer retail sector.

StashAway, Southeast Asia’s leading digital wealth manager has attracted US$16 million in Series C fundraising round. Australian venture capital fund Square Peg led the round, which Burda Principal Investments and existing investor Eight Roads Ventures participated in.

Since its Series B fundraising round a year ago, StashAway has launched the Income Portfolio in Singapore and a cash management solution, according to a statement. Eight Roads led the Series B $12m round.

Singapore is Vietnam’s top foreign investor

SVCA Quarterly: Deal news Page 9

Digital Wealth Manager gets $16m in Series C funding

Gojek continues to receive funding during the COVID-19 pandemic, with PayPal and Facebook investing $375m after Mitsubishi and Visa injected $1.2 billion in March.

PayPal and Facebook joinSeries F funding for Gojek

Singapore-based software-as-a-service (SaaS) company, Insider, has received $32 million in a Series C round which Sequoia Capital India has participated in. Also based in Singapore, Beam, an e-scooters sharing platform, raised $26 million in a new financing round led by Sequoia and Hana Ventures. The startup has raised $32.4 million to date, a spokesperson told TechCrunch.

Sequoia and Lightspeed Venture led in June a $10.5m seed funding round into Ula, an Indonesian marketplace platform that focusses on modernizing distribution and credit processes in the traditional retail sector.

In May, Sequoia led a $109 million Series B round into Kopi Kenangan. Eduardo Saverin’s B Capital, Horizons Ventures, Verlinvest, Kunlun, Sofina and Alpha JWC Ventures also participated in the round. Saverin will join the Indonesian beverage retailer’s board. This is Sequoia’s third capital injection into Kopi Kenangan.

Sequoia busy in SE Asia

Deal News

Warburg Pincus has increased its stake to become the largest shareholder in Singapore’s real estate fund manager, ARA Asset Management (ARA) following the exit of AVIC Trust. Warburg Pincus has upped its stake in ARA to 48.7% from 30.72% while the three pre-privatisation shareholders co-founder John Lim (via JLIG), Li Ka-Shing’s CKAH and Straits Trading have also increased their aggregate holdings to 51.3%, according to a media statement on 26 May, 2020.

AVIC Trust, the investment arm of Shanghai-listed AVIC Capital, disposed of its 20.48 per cent stake. Prior to the change in shareholding structure, Straits Trading, JLIG, and CK Asset held 20.95 per cent, 19.85 per cent and 8 per cent respectively, amounting to a 48.80 per cent interest in total, according to Business Times.

ARA delisted from the Singapore stock exchange in April 2017. This is the first time since it was privatised that the company has made an announcement over its shareholding structure change.

CapBridge Financial has acquired equity investments from SGInnovate, which aims to help scientists establish “Deep Tech” startups and Hong Kong’s Cyberport Macro Fund, which offers seed to Series A stage funding to Cyberport digital entrepreneurs.

CapBridge provides an integrated private market ecosystem that consists of $2 billion worth of deal offers a regulated securities exchange for private firms in Singapore.

Dr. Lim Jul, CEO at SGInnovate, noted: “The disruptions caused by the pandemic have underscored the urgency for alternative fundraising pathways, enabled by Deep Tech and enhanced

Warburg Pincus ups stake in ARA

SVCA Quarterly: Deal news Page 10

CapBridge gets funding from SG and HK

connectivity. The CapBridge platform has the potential to optimize the capital raising experience for growth companies in Singapore and the region.”

CapBridge plans to further scale its operations in Hong Kong to meet the growing demand in the city-state’s private markets.

Share prices of Symphony International Holdings Limited (SIHL), a Singapore-based private equity investment fund listed on the London Stock Exchange have been hovering at levels last seen in the aftermath of global financial crisis. At press time, the share was 30 U.S. cents, just above 28 cents on 24 July. The same day, Symphony announced that rights issue by Minor International (“MINT”), the listed fund’s largest portfolio investment, was oversubscribed by about 30%. “The proceeds of the rights offering will be used for working capital and to refinance existing debt obligations, as well as acting as a cushion for any unexpected uncertainty amidst the currently improving COVID-19 situation.”

Earlier, MINT successfully issued USD 300 million in perpetual bonds, and obtained waiver of financial covenant testing until fiscal year end of 2020. In addition, MINT targets to raise additional equity of approximately Baht 5 billion from 3-year warrants, which will be issued to all shareholders as at the warrants' record date on 7 August 2020.

MINT is a hotel owner, operator and investor with a portfolio of 530 hotels, 2,200 restaurants outlets system-wide in 26 countries and one of Thailand's largest distributors of lifestyle brands and contract manufacturers.

In May, Symphony announced that the Company's unaudited Net Asset Value on 31 March 2020, was US$310,240,259, or 38% down from Q4 2019, representing a Net Asset Value per ordinary share of US$0.6043 (31 December 2019: US$0.9805).

Symphony share pricenears record low

Deal News

Ardian, which raised a record $19 billion for its eighth generation secondaries platform, is seeing increased opportunities for secondaries in Asia. The European giant secured $14 billion for Ardian Secondary Fund VIII and $5 billion for co-investments. The combined $19 billion collected represents the third largest pool of capital ever raised for private equity, and a significant increase from $14billion raised in 2016.

The $5 billion collected for co-investments also reflects a growing appetite for direct investments.

“Co-investment rights vary between GPs but generally, LPs who can meet GP requirements tend to have larger AUMs, and also the teams or resources to carry out direct investments,” Won Ha, managing director at Ardian told SVCA.

 “Secondaries investing as a strategy has become increasingly popular thanks to quicker cash distributions from older funds, mitigating J-curve effects, hence better returns. For the purpose of portfolio construction, secondaries offer access to past vintages across strategies, geographies to provide investors even greater diversification.  While the private equity history in Asia has been relatively short, the region is presenting greater opportunities amongst GPs as well as LPs than in the past,” Won shared.

“There are only really a couple of LPs in Singapore who have been investing in private equity for a long time. Most of the newer LPs in this region are actively buying, rather than selling their LP positions. As for GPs, there are a couple of names in Southeast Asia that are quite interesting.”

Ardian is optimistic that they have a strong pipeline of deals to work on, and that even before COVID-19, their pipeline contained $20 billion worth of opportunities, and concrete due diligence has been conducted for $7 billion which are in advance stages of dealing. And the pandemic has created an even stronger demand for secondary deals - from LPs as well as GPs.

SVCA Quarterly: Ardian jumbo fund Page 11

In Conversation with Ardian in Asia

Ardian expects to deploy about 10 percent of the $19 billion into Asia compared to 7% to 8% previously. The impact of the pandemic on Asian portfolio is limited compared to other regions. Most of Asia particularly China, South Korea, Hong Kong, Taiwan, Australia and New Zealand have managed to control infection rates and death from COVID-19 better than the rest of the world.

Conversely, “because a large part of the Asia PE portfolios are in TMT, particularly internet-centric customer services, a number of GPs may actually have benefited from this crisis,” Won concluded.

“And while $19 billion may seem like a lot of capital to be put to work, the total private equity market raised $830 billion in 2019 and raised $3.7 trillion globally in the past five years. Pre-GFC, LPs have more appetite for various GPs, but post-GFCs, LPs prefer picking fewer names because they have developed a more disciplined criteria.  But the GPs who will continue to raise capital will get bigger. With proven GPs, more stable return profiles can be found,” Won explained.

Sequoia investing inSE Asia from 2 fund vehiclesSequoia Capital India has raised $1.35 billion for two funds that will be deployed in southeast Asia and India. Sequoia raised $525 million for a venture fund, and $825 million for a growth fund. The combined $1.35 billion is nearly double the $695m the firm raised for a sixth fund in 2018 that invested in venture as well as growth opportunities. In 2019, Sequoia India invested in 45 startups, according to a report by Inc42.

KKR has secured $10 billion for its fourth Asia flagship buyout fund, on track to close on a $12.5 billion target, according to news reports. The US buyout giant was reportedly targetting $15 billion for a final close before COVID-19 swept the world, infecting 16.5 million, killing more than 654,000 by 28 July.

KKR has also raised $950 million for a second fund dedicated to the subordinated new issue commercial mortgage-backed securities (CMBS), which come with greater risks, but potentially higher returns.

Wavemaker surpasses target toclose third fund on $111m

SVCA Quarterly: Fund news Page 12

Wavemaker Partners exceeded an initial $100 million target to raise $111m for its third Southeast Asia fund. The Singapore venture firm attracted new investor  & along with existing backers including Temasek Holdings Pte, Pavilion Capital, IFC and Vulcan Capital.

The latest fund marks a significant increase from $66m raised for Fund 2, which according to the firm, was “already the largest early-stage fund focused on enterprise and deep tech start-ups in SEA.

Since 2012, the firm has invested in over 130 startups. Over 100 (86%) of them are enterprise-focused with over 40 (32%) of these in deep tech and artificial intelligence.”

Wavemaker made six exits in the last two years: Indonesian mobile point-of-sale system Moka (acquired by Gojek) cloud communications software company Wavecell (acquired by 8x8) and Red Dot Payment (acquired by PayU/Naspers).

Fund News

KKR on course toclose largest Asiafund

GIC returns sink topost-GFC low

In 2019 alone, the venture capital firm funded 45 startups. Also last year, Sequoia launched an accelerator programme Surge through which it invests $1m to $2m in participating early stage startups. The third cohort of 15 startups which started on the accelerator programme in April will take part in day-long workshops, group discussions and chats with Surge mentors including Tokopedia founder William Tanuwijaya and Sequoia global managing partner, Doug Leone over the course of 15 weeks.

in nominal USD terms, lower than 5.7% as at 31 March 2009, according to GIC 2008-2009 report.

GIC has held a cautious macro stance in recent years, and had “grown increasingly concerned about high asset valuations and high uncertainty, and had therefore reduced our portfolio risk.”

GIC warns of more market turmoil ahead.

Private equity made up 13 percent of GIC portfolio in the year to 31 March, up one percentage point year on year, whilst allocation to equities dropped to 15% from 18-19% in the year to 31 March 2019.

“The share of bonds and cash rose as these lower risk assets benefitted from the flight to safety,” GIC said.

The United States makes up the biggest chunk of GIC's portfolio at 34%, followed by Asia, with 32% and the Euro zone at 13%. This compares to US at 38%, Europe, 29% and Asia (excluding Australia at 2%), 24%, according to GIC 2008-2009 report.

GIC is of the view that the COVID-19 crisis will bring fundamental changes: major retreat from globalisation, supply chain shifts and nationalistic policies, hurting global productivity growth over the longer term. Asian economies are likely to adapt their export-led growth strategies and business models over time, and intra-regional trade will strengthen.

At Temasek Holdings, the one year total shareholder return is a negative -7.1% in USD terms for the twelve months ended 31 March, 2020, according to a preliminary portfolio performance released in July. Temasek’s net portfolio value declined to US$214 billion, from $231 billion in 2019.

GIC of Singapore has reported that its rolling 20-year annualised real rate of return (return above global inflation) has fallen to 2.7 percent, near a record low of 2.6% seen in 2009 post global financial crisis, and down from 3.4% in the last financial year.

The GIC Portfolio return - over the 20-year period - was 4.6% per annum

FundraisingDuring Covid-19Market Insights: Fundraisingamidst COVID-19

Danny Tan

The COVID-19 situation deteriorated globally in March and April - an unprecedented crisis that has left governments around the world scrambling with the uncertainties, learning as they go along. While many - businesses and GPs alike - have been fighting fires in the same period, many countries around the world e.g. US, China and Singapore have started to ease lockdowns.

Many Asian GPs feel that there will be good investment opportunities in the next 12 months and they want to be in a position to catch the wave. So even though there is still some degree of uncertainty with the Covid-19 situation over the next few months, these GPs are already making plans and keeping close contact with potential LPs.

Some LPs, especially the more institutional ones, have continued to invest in recent months and some, which have suspended discussions with GPs earlier, are returning to the table. I am cautiously optimistic that barring another sharp deterioration on the Covid-19 front, we should see fund-raising in this part of the world recover slowly in the next couple of quarters.

Nik Rowold on CVCclosing Asia fund inApril at $4.5bn

Timing sometimes is really, really important. The Asia fund closed at the hard cap in April, but the fundraising process probably started formally 18 months prior. For us, fundraising is an ongoing effort whether you are zero percent or 80 percent invested. Moreover, our Asia fund is a fifth fund, with the benefit of 20 years of track record and history, which gives CVC credibility and relationships.

In the current environment, you need that connectivity and credibility with an investor to say, “look, I know the world is tough out there, but we have a history of working together, and yes this is a very difficult period but we have been through crises before, together, and individually, we know there is light at the end of the tunnel.”

And yes, while it is difficult for GPs to try and raise capital right now, it is equally hard for investors to try and deploy capital; you’re sitting at home, you need to get through legals, due diligence, you need to coordinate everything remotely. It’s been remarkable for us to see how investors globally were able to work in very difficult circumstances, to move remarkably efficiently through a fundraising process and get done at the same level of quality of investments done as they have historically. It really shows if there is a good partnership between the fund and the investor, a lot can be accomplished even in very difficult circumstances.

SVCA Quarterly: Market Insights on Fundraising Page 13

Abrar Mir on Quadriaclosing Fund II in March:

We are a very small firm in contrast to CVC, and even though we are one of the largest PE funds focused on healthcare, comparatively, we are still a tiny piece of the private equity landscape.

For the likes of CVC, to get a meeting with any LP around the world, doors will open to hear their story. For us, and many emerging GPs, its a constant struggle to build credibility, not just to sell our story, but to sell the industry, region and our particular investment strategy.

I do think that fundraising is going to get increasingly difficult for smaller guys, and it doesn’t matter whether they are a first time fund or a third time fund, a niche fund or a regional fund. There are a number of factors why that is: first of course that 2019 was a stellar year; 2020 at the beginning, we were seeing a slowdown even before COVID hit. And then it accelerated: due diligence, physical meetings, then the denominator effect for the large LPs that have been hit by the market correction in March, meaning a lot of them have an overallocation to PE that needs to be recalibrated. Then there’s cashflow. LPs are seeing a lot of capital calls but perhaps not the same level of cash returned from exits, that just adds to the pressure in fundraising.

For fundraises where investors IC approvals had been obtained before the UK went into lockdown toward the end of March, those funds managed to successfully close.

Then came the slowdown, with investors taking a step back whilst waiting for more certainty, probing managers to understand business continuity plans and how they were dealing with their portfolios; reassessing their allocation (given the denominator effect).

Managers, on the other hand, were focused on ensuring there was sufficient cash - either through recycling or similar provisions or by drawing on their credit facilities even if not immediately needed - to inject into struggling portfolio companies, replace income that ceased to be provided by portfolio companies, meet fee and other obligations. As yet we have not seen evidence of increased LP defaults.

What people are asking in this current market is whether there is an increase in LP default. The answer is generally ‘no’ as most of the deals are backed by strong institutional investors like sovereign wealth groups, rather than family offices.

Fund finance is a very useful tool to help fund managers bridge the timing needed to deploy funds into the market. It is also attractive to regional banks because it is often backed by strong fund life cycle.

Nicola Hopkins onfundraising trendsin Europe:

Chris Loh on AxiomAsia investing duringCOVID-19:

We have continued to invest in the past couple of months. We noticed a remarkable slowdown in the industry which is not surprising. We try our best to mitigate risk of investing. Most investors will say they are not comfortable to invest because they haven’t met the person face to face, whether they are investing in a business or a fund.

While face to face meetings are an important part of due diligence, you can raise the quality bar. In the past, an investment may score 7 points to be investible. Today, the investment must score 9.5 and above to be investible.

Because we are not traveling now, we do more Zoom calls. And by getting different data points, we hope to compensate for what we can’t through face to face meetings.

SVCA Quarterly: Market Insights on Fundraising Page 14

SVCA hosted on June 10th a webinar to look at fundraising and fund financing trends amidst COVID-19. We brought Abrar Mir, Cofounder at Quadria Capital and Chris Loh, Managing Partner at Axiom Asia and Nik Rowold, Managing Director - Investor Relations, at CVC Capital to the discussion with international law firm, Ashurst, which was represented by three Partners, Nicola Hopkins in London and Danny Tan (Moderator) and Jean Woo in Singapore.

Advice to those whoare fundraising

In this environment, the list of funds strategies, GPs that attract capital just shortens quite a bit for the LP. So you need to be uniquely qualified in a particular field, have very strong credibility to deliver what you say you’d deliver, history and tenure, and a track record of making money and not losing money.- Nik Rowold

Don’t try to please every LP. Clearly define investment proposition and opportunity and demonstrate how you, as a team, are well positioned through experience, expertise, track record to execute. And if you can articulate how you can execute that with a level of certainty which translates to visibility on deal flow, that will resonate with LPs.- Chris Loh

First time funds can convince an LP that they are not so risky by showcasing some pipeline deals to provide visibility into the fund, and demonstrate your ability in accessing good deals (by showing a list of influential people who are the GP's advisors or venture partners).- Abrar Mir

Jean Woo on fundraising amidst COVID-19:

SVCA Quarterly: Funds Table Page 15

ASEAN Fundraising at a Glance - Q2 2020