With few big deals, private equity moves to be Asia’s new banker
Aug 5 (Reuters) – In three years, global private equity firm KKR & Co has provided over $1.5 billion in loans to companies in India, a business traditionally handled by state-owned and private sector banks.
Encouraged by that success, KKR – which rose to prominence with its hostile $25 billion takeover of U.S. food and tobacco giant RJR Nabisco in 1989 – plans to expand the niche business in China and across Asia.
The move by private equity into lending comes at a time when buyout deals in Asia are few and far between and as traditional banks retreat. Apollo Global Management, KKR and Olympus Capital are raising credit funds as they seek out alternative sources of income. At least $6.6 billion is being raised by 12 funds for investment in Asia, according to Private Equity International and Thomson Reuters data.
Posted by admin on August 5, 2013
Asia Private Equity Weekly News, July 29, 2013
MALAYSIA’S STATE pension fund will invest half a billion euros ($660 million) in industrial property in Germany and office space in France, according to sources familiar with the deals, signalling growing appetite for high-yielding property assets as Europe’s main economies show signs of recovery.
MEIJI YASUDA Life Insurance Co said it has agreed to buy a 15 percent stake in Thai Life Insurance Co as Japanese insurers step up their presence in Southeast Asia.
CHINA’S $500 billion sovereign wealth fund, China Investment Corp, returned to profit growth in 2012, citing growing traction in the global recovery at the end of the year and a steady improvement in risk asset prices.
Posted by admin on July 31, 2013
Connections trump everything in world of private equity in China
Private equity doesn’t have a long history in China, but it has grabbed attention over the past few years, partly because of the individuals standing behind the businesses. In other words, people are key in China. I mean, well, those special people.
How special is special? What kind of people are private equity funds looking for in China? Here is a job e-mail I received from a headhunter last week who is helping an unidentified “well established private equity firm with both US-dollar and yuan-denominated investment platforms” to hire a vice-president-level investment professional.
Posted by admin on July 29, 2013
Tide Turns for Private Equity in India
The rupee’s slump to a record low is adding to the woes of foreign private-equity firms invested in India even as they deal with slowing economic growth and a big drop in initial public offerings this year.
Those firms piled into the country in 2007 and 2008, when the economy was expanding at 8% to 9%. Since then, growth has fallen, sliding to a 10-year low of 5% in the fiscal year that ended in March.
The rupee has fallen by around 52% since hitting a multiyear high in late 2007. It reached a record low of 61.20 to the dollar this month before strengthening to trade at around 59.40 on Wednesday.
The rupee’s decline has eroded the dollar value of investments made by private-equity firms five to seven years ago, their typical investment horizon. That makes it more difficult to sell out of investments with a profit.
“In dollar terms, almost every investor is down 30% to 40%” since 2008, said Nikhil Raghavan, principal at private-equity firm Bain Capital LLC in Mumbai.
Posted by admin on July 26, 2013
Why Looking Good Matters to Asian Private Equity Firms
Investments into skincare and cosmetic companies are proving an attractive proposition for Asian private equity firms as consumers spend more money on beauty products.
L Capital Asia, a private equity shop backed by LVMH Moet Hennessy Louis Vuitton, has become the latest firm to invest in a Chinese skincare company called Guangdong Marubi Biological Technology Stock Co., becoming the second-largest shareholder in the company.
Private equity investments into Asian perfume, cosmetic and toiletries businesses rose to six deals last year, up from two in 2011, according to data provided by Preqin. So far this year, there have been three deals: L Capital Asia’s $100 million investment into Marubi, ChrysCapital’s $43.1 million investment into Indian shampoo and skincare company CavinKare, and Baring Private Equity Asia’s $2.9 million investment into Hong Kong-listed skincare business Magic Holdings International Ltd.
Posted by admin on July 17, 2013
China private equity returns plummet -report
(Reuters) – Profits from China’s private equity deals have fallen since 2007, a new industry report says, leading to a sharp decline in funds for small and mid-size companies in the world’s second largesteconomy.
China’s private equity industry emerged later than its North American and European peers, but has become a vital source of growth capital for the country’s smaller companies, which struggle to get regular bank loans.
Private equity capital has fuelled companies such as Alibaba Group, 360Buy and Tudou Holdings , and the prospect of strong returns attracted investors to commit $124 billion to China in the last 10 years, says Asia Private Equity Review, which produced the report.
Posted by admin on July 12, 2013
China’s CSRC May Soon Be Crowned the Country’s Private Equity Regulator
The scales are tipping in favor of the China Securities Regulatory Commission as it battles it out with China’s top economic planner, the National Development and Reform Commission, to become the key regulator of its local private equity funds.
China’s State Commission Office for Public Sector Reform recently announced that the CSRC will oversee the administration of domestic private equity and venture capital funds, including the protection of their investors. Meanwhile, the NDRC will focus on formulating policies to help promote the private equity industry.
The fact that the State Commission Office for Public Sector Reform, which is led by both the State Council and the Community Party of China, got involved in this internal dispute “suggests that this tug of war needed to be resolved at an unusually high level of government,” Andrew Ostrognai, a Hong Kong-based corporate partner and chair of Debevoise & Plimpton LLP’s private equity practice in Asia, wrote in a note.
Posted by admin on July 10, 2013
US Private Equity Invest Heavily In Restructuring Asian Shipping Firms Following Shipping Downturn
Asia’s shipping industry may have just been hit by the restructuring wave that has already swept Europe and the U.S., but American private equity and investment funds are investing in hopes of riding a recovery from the worst shipping downturn in three decades.
The Asian shipping industry hit hard times in 2007 and 2008, when it splurged on new ships that were delivered just as demand slumped, particularly on once-lucrative oil routes between the Middle East and Asia, according to the Jakarta Globe, an Indonesian newspaper.
That spree sent charter rates down as much as 90 percent, and halved the value of vessels bought at the top of the market, according to data from the maritime consultancy Clarkson Research Services.
Posted by admin on July 3, 2013
Asia’s richest person Li Ka-shing expands reach into Europe
HONG KONG: A consortium of companies owned by Li Ka-shing, the richest person in Asia, said Monday that it would pay more than $1 billion to acquire Dutch waste management firm AVR from its private equity owners.
Li’s companies have been seeking to expand their already considerable global portfolio of investments in utilities and infrastructure, which include electricity plants in Australia and natural gas networks in Britain.
Under the 943.7 million euro, or $1.26 billion, deal, four Li firms will acquire AVR, which incinerates waste and converts it into energy, from a Dutch company jointly owned by private equity firms Kohlberg Kravis Roberts and CVC Capital Partners.
Posted by admin on June 17, 2013
From investors to large multinational corporations, China continues stirring interest, as the Chinese capital markets in general are still in a nascent stage of development. Private equity and venture capital firms have helped launch new companies and grow regional players into national competitors, usually taking only minority stakes, aided by the robust economic growth expected for the next decade, still relatively abundant opportunities, less competition and a positive government attitude. How long will it take for China to exhibit experienced pension funds and other big institutional investors, the backbone of private equity funding in the West? How capital markets will evolve and which investments opportunities are currently available?
Posted by Innovator on May 30, 2013