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Private equity and venture capital research, reports and surveys with a country-specific focus

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• unquote": Second quarter 2010 – activity and optimism hold up 19 Jul 2010. Source: unquote". In Unquote’s regular quarterly commentary on UK private equity investment activity, Corbett Keeling gives a practitioner’s view of trends in the number, value and financing of deals - and finds activity and optimism are holding up.

• Asia Private Equity Review July 2010 15 Jul 2010. Source: Asia Private Equity Review. In a country that extols the virtue of loyalty and advocates a structured society, the political scene in Japan has been unusually turbulent. In early June, following the resignation of Mr Yukio Hatoyama, Mr Naoto Kan, deputy prime minister and Minister of Finance, took office. He is the country’s fifth prime minister since former Prime Minister Mr Junichiro Koizumi stepped down in September 2006. In the four years and nine months that followed the departure of Mr Koizumi, no prime minister in Japan had been able to stay in office for more than 14 months. Even though Mr Hatoyama represented a new political direction and his Democratic Party of Japan broke decades of rule by the Liberal Democratic Party, Mr Hatoyama managed to score only 259 days as prime minister.

• The Association of the Luxembourg Fund Industry – annual report 2009/10 07 Jul 2010. Source: Association Luxembourgeoise des Fonds d’Investissement. The European Commission published its proposal for a directive on Alternative Investment Fund Managers (the AIFM Directive) at the end of April 2009. This proposal – which introduces harmonised requirements for entities engaged in the management and administration of alternative investment funds (AIFM) – is part of the ambitious Commission program to extend appropriate regulation and oversight to all actors and activities that embed significant risks.

• Forming a foreign-invested RMB fund in China 05 Jul 2010. Source: Guo Lian PRC Lawyers. Steven Wei Su. Thanks to the buoyant economy and the strength of the Chinese renminbi (RMB) against US dollars, China has been in the spotlight of private equity investment for longer than a decade. There are primarily two private equity deal structures, i.e. offshore deal structure and onshore deal structure. In the past, investors have been accustomed to consummating transactions through offshore deal structure to overcome the inconvertibility of RMB and China’s market-entry restrictions, writes Steven Wei Su, a partner at Guo Lian PRC Lawyers in Beijing.

• The Russian economy and private equity market in June 2010, according to Aurora Investment Advisors 20 Jun 2010. Source: Aurora Investment Advisors. Elbrus Capital has been launched as a new Russian private equity firm, following last year’s purchase of Renaissance Private Equity from Renaissance Group. The group has around $160m in legacy dry powder to invest. Its principals are: Dmitri Krukov, former managing partner of Renaissance Private Equity, Alexander Savin, former CEO of A1 Group, and Robert Thielen, founder and managing partner of Waterland Private Equity.

• Asia Private Equity Review June 2010 15 Jun 2010. Source: Asia Private Equity Review. With the exception of those based in Australia and New Zealand, Asia’s institutional investors have mainly partnered with private equity investors when deploying capital to unlisted assets. The year before the global financial crisis, in 2007, 72 per cent of the deals consummated by institutions were participated in alongside general partners. This equation has changed.

• The Dutch private equity market in 2009 – enterprising equity 01 Jun 2010. Source: NVP. The economic recession was felt right across society once again in 2009. This is partly why the private equity sector invested and divested less than in previous years. Total capital under management of Dutch private equity firms stabilised at €23.3bn.

• The Russian economy and private equity market in May 2010, according to Aurora Investment Advisors 20 May 2010. Source: Aurora Investment Advisors. UFG Private Equity Fund II has acquired 15 per cent of Wi-Max operator Prestige-Internet, which provides services under the brand name Enforta. The fund acquired the shares directly from Sumitomo Corporation, which had previously owned over 30 per cent of the company. Prestige-Internet provides Internet access services via WiMax technology in 70 cities in Russia under the brand Enforta and Enter. It services 32,000 corporate and 20,000 private clients.

• Asia Private Equity Review May 2010 18 May 2010. Source: Asia Private Equity Review. Conservative economists in the West have long argued that the value of capitalism can only be fully realised when government involvement is kept to an absolute minimum. Ironically, in China and India, it is government-related bodies that have been the forces behind private equity funds’ momentum.

• Closing gaps and moving up a gear: The next stage of venture capital’s evolution in Europe 14 May 2010. Source: EVCA. The European Private Equity and Venture Capital Association (EVCA) believes that the time has now come to adapt and refine the existing structures of public support for venture capital. This will allow the policy successes of the last decade in stimulating venture capital, achieved most notably through the execution of the European Investment Fund, to be built upon and allow the European venture capital industry to move to a new stage of development. This should increase its competitiveness, attract private investment and also lead to a phased reduction of its dependence on public money at national and at European level. EVCA believes that the lack of investment by private investors in venture capital is not a cultural issue or a reflection of the fact that European institutional investors might be overly risk adverse but rather a structural problem and can therefore be resolved. In this White Paper EVCA makes recommendation as to the next steps which the European Commission and other EU policymakers should undertake.

• Alternative Investment Fund Managers directive – asset managers global survey 11 May 2010. Source: KPMG. It seems clear that the AIFM directive will fundamentally alter the alternative funds market for institutional investors. While the uncertainty this draft directive has generated should be of no surprise, the scale of that uncertainty is. Over half of participants in the survey are waiting for the final text before absolutely committing to the location of their funds and not many fewer to the location of their management businesses.

• Report of Expert Group on removing tax obstacles to cross-border venture capital investments 05 May 2010. Source: European Commission. There is a need within the European Union for a dynamic venture capital industry that is capable of providing early-stage equity financing to the EU's most innovative high-growth small and medium-sized enterprises. SMEs and businesses backed by financial and business support such as VC can generate economic growth, create new jobs and contribute to the design and use of new knowledge and technology. Active VC markets would be important drivers of the more competitive, entrepreneurial, innovative and dynamic European economy that the EU's Lisbon Strategy aims to achieve. VC investment can also play a significant role in strengthening European economies in the current economic turbulence and downturn.

• The Russian economy and private equity market in April 2010, according to Aurora Investment Advisors 15 Apr 2010. Source: Aurora Russia Limited. Wal-Mart is currently in discussions with TPG Capital, a private equity fund and owner of a 25 per cent stake in St Petersburg retailer Lenta on the possibility of a potential acquisition, an executive at the Russian retail firm said. Wal-Mart has been actively seeking a platform to enter Russia’s growing consumer market.

• Asia Private Equity Review April 2010 13 Apr 2010. Source: Asia Private Equity Review. When Pantaloon Retail, one of India’s biggest retailers, decided to merge its retail chain, Home Solutions Retail into the parent company, it signalled a new dawn had arrived for India’s retail industry. The fifth largest on the globe, India’s retail industry has been enjoying an annual growth rate of 28 per cent for the past five years. According to India Brand Equity Foundation (‘IBEF’), a government sponsored trade organisation that tracks India’s consumer products, by 2010 its country’s retail market is forecasted to command $570bn.

• Directive on Alternative Investment Fund Managers Volume I: Report 22 Mar 2010. Source: House of Lords. This House of Lords report examines the proposed Alternative Investment Fund Managers directive which introduces an EU-wide approach to the regulation of Alternative Investment Fund Managers, including hedge fund and private equity fund managers. The directive aims both to increase the stability of the financial system and to facilitate the single market in Alternative Investment Funds.

• The Russian economy and private equity market in March 2010, according to Aurora Investment Advisors 15 Mar 2010. Source: Aurora Investment Advisors. In a recent Mergermarket survey on the current Russian M&A environment, responses from Russian M&A and corporate finance decision makers were split, polling nearly 50 per cent each on whether foreign or local private equity companies will dominate the M&A landscape this year. Private divestments and public takeovers are likely to be the most frequent sources of private equity acquisitions in Russia in 2010.

• Asia Private Equity Review March 2010 11 Mar 2010. Source: Asia Private Equity Review. Ever since Mr Ajay Relan, former managing director and head of the India operation of Citi Venture Capital International made the landmark move to leave the institution in 2008 and form his own private equity firm, CX Partners, it ushered in a new movement that has seen a growing pool of general partners seeking independent status. In mid February, Axis Private Equity, one of the youngest private equity firms in India, confirmed its plans to spin out from its parent company, Axis Bank. It is also the first Indian private equity firm that focuses solely on infrastructure financing to wean off of its founding parent.

• European private equity in review, 2009 edition 08 Mar 2010. Source: mergermarket. Looking back, few in the European private equity industry will remember 2009 with much fondness. It is plainly clear that last year marked a low-water mark for the industry, so reliant, as it was, on the availability of cheap leverage that fuelled the buyout boom. And, as debt capital markets imploded after Lehman Brothers’ bankruptcy, private equity’s fall from the heights of the pre-crisis period was no less spectacular than the very investment banks that funded the dealmaking frenzy.

• HSBC Emerging Markets Insights 2010 04 Mar 2010. Source: HSBC. We have reached a tipping point in global economic affairs. No longer is it possible to argue convincingly that the US or European nations determine the agenda for the world economy as a whole. 2009 will surely go down as the year when we both uncovered the scale of the crisis in the developed world and celebrated the resilience of much of the emerging world in the face of what appeared to be a perfect economic storm. We found, in particular, that China was able to stand on its own two feet, capable of delivering rapid economic growth even while its export engine was badly misfiring.

• The Russian economy and private equity market in February 2010, according to Aurora Investment Advisors 17 Feb 2010. Source: Aurora Investment Advisors. Sweden's investment fund East Capital is setting up a partnership company together with the European collector Intrum Justitia to buy up Russian non-performing consumer loan portfolios. Investments of two private equity funds East Capital Financials Fund and East Capital Explorer in non-performing loans are scheduled to amount to about €20m.

• Asia Private Equity Review Feb 2010 15 Feb 2010. Source: Asia Private Equity Review. In a recent article authored by Mr Kamal Nath, India’s Minister of Road Transport and Highways, and published by The Wall Street Journal, Mr Nath pointed to good roads as a central agenda in improving the country’s infrastructure. “We need to build them (roads) quickly to maintain our edge as Asia gets set to lead the world to economic recovery”, Mr Nath said as he encouraged the inflow of foreign capital to India. By June this year, Mr Nath’s ministry hopes to award $20bn worth of contracts and in the subsequent 18 months, an additional $50bn.

• The use of luxembourg vehicles in spanish private equity 11 Feb 2010. Source: SJ Berwin. Germán Menendez. Luxembourg is still the second most important investment fund domicile in the world after the US. A friendly tax regime and a familiar legislation and jurisdiction to market actors are the contributing factors to its success. In this article we will analyse the main reasons why Spanish private equity entities use Luxembourg vehicles, writes Germán Menendez, an associate with SJ Berwin.

• Investment opportunities in the MENA region 27 Jan 2010. Source: Evalueserve. Countries in the Middle East and North Africa (MENA) region, driven by the need to provide employment to a growing workforce and counter increasing competition from other emerging markets, have introduced economic and investment reforms to increase private investment in their countries. Although the level of foreign private investment in the MENA region throughout the 1980s and 1990s remained low, the region has now become attractive to investors due to acceleration in the pace of reforms and a decline in the role of the state. Foreign Direct Investment (FDI) inflows increased at an average of 28 per cent per annum, from $13bn in 2000 to over $97bn in 2008.