Asia

Private equity and venture capital research, reports and surveys with a focus on Asia

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• From Public to Private – The Road Less Travelled, according to Nishith Desai Associates 05 Oct 2009. Source: Nishith Desai Associates. Archana Rajaram, Amrita Singh. Under current market conditions where stocks of numerous listed companies are being undervalued or turning illiquid, the option of going private (i.e., where publicly listed companies decide to delist and become public unlisted or private companies) is starting to look up now more than ever. Falling stock prices and bearish markets aren’t the only luring factors to take a company private. Listed companies in India are required to follow elaborate corporate governance norms that are largely similar to those found worldwide. These norms are provided under the listing agreement entered into between listed companies and stock exchanges in India, and a host of other regulations and guidelines issued by SEBI (Securities and Exchange Board of India).

• China Matters: Draft foreign-invested partnership regulations – new possibilities for global funds in China? 10 Sep 2009. Source: Paul Hastings. On August 24, 2009, it was reported that the latest draft of the long-awaited Administrative Measures for the Establishment of Partnership Enterprises by Foreign Entities or Individuals in China (the “Draft FIP Regulations”) was approved in principle by the State Council of the People’s Republic of China (the “PRC”), and has been returned to the Ministry of Commerce (“MOFCOM”) for further refinement.

• Private Equity in India - a round up of Indian private equity according to Advisory Research Consultancy 14 Jul 2009. Source: AltAssets. As the Indian markets saw a revival, the country’s private equity industry got some breathing space, according to this report from Advisory Research Consultancy. The research evaluates private equity in India for the second quarter of 2009 as it compares to the previous quarter.

• India Budget 2009: tax proposals - a summary by Nishith Desai Associates 07 Jul 2009. Source: Nishith Desai Associates. While the US and UK governments have responded to the economic downturn by raising taxes, India has chosen to tread a different path. The budget announced on 6 July by Finance Minister, Pranab Mukherjee, has proposed a reduction in the personal tax rates from around 34 per cent to 31 per cent. Further, the basic corporate tax rate has been maintained at 34 per cent.

• China’s state-owned banks’ missed opportunity opens the way for some global banks to prosper 20 May 2009. Source: China First Capital. Peter Fuhrman. If ever there were a case of “a chart tells a thousand words”, it’s this one, courtesy of The Economist and Macquarie Research:

• China Economic Scan – fortnightly report on private equity in China: 20 April to 1 May 2009 01 May 2009. Source: China Economic Scan. China Economic Scan has provided AltAssets with a round-up of private equity-related developments in China. In this edition: China's huge state pension fund eyes private equity; Alibaba Group Makes Strategic Investment in Koubei.com; China GEM to establish independent approval committee; Zhongwang Seeks $1.6bn in 2009's Largest IPO; Asia Junk Bonds Pay Record, Return, Beat U.S., Europe; Goldman Sachs Raises China Economic Growth Forecasts; Agricultural Bank won't cut staff or branches before IPO; China to launch agency to reform state firms-sources; China's Corporate Profits Fall 73 per cent, Haitong Says; China Shenzhen Bank Q1 net up 12 per cent on loan growth; Property investment continues; China sovereign fund CIC names new private equity head; Zhongwang Said to Raise $1.3bn in Hong Kong IPO; Citic Securities Posts 40 per cent Drop in Net Profit; IDFC Raising $500m Fund Of Private-Equity Fund - Source; Credit Suisse's Zhu Said to Quit to Start Private-Equity Firm.

• An overview of private equity in India according to ICICI Bank 30 Apr 2009. Source: ICICI Bank. Amit Ratanpal. 2008, the year, which shook the entire globe, left an unforgettable impression on the history of the financial world. Even though India is predominantly a domestic consumption driven economy, it suffered from global volatility and uncertainty. During the year, there has been a slowdown in the economy across the board. Auto sales have plunged on lagged impact of monetary tightening, exports decelerated, industrial production took a backseat on falling capital goods and intermediate goods output and credit growth has faltered, according to Amit Ratanpal, head of private equity at ICICI Bank.

• China Economic Scan – fortnightly report on private equity in China: 6 April to 17 April 2009 20 Apr 2009. Source: China Economic Scan. China Economic Scan has provided AltAssets with a round-up of private equity-related developments in China. In this edition: Private equity investors favour China; Hong Kong court approves PCCW buy-out; 8 Chinese firms raise RMB7.77bn in news funds in March; China to hold overseas investment fair in November; Huiyan still looking for a partner; notes on control deals in China; China to launch GEB - a NASDAQ-like SME board; Chinese firms resume overseas floats, Ping An shares soar; China encourages shareholder reform and restructuring of publishing industry; China looks to encourage FDI; SPD Bank to raise RMB30bn in debt and equity.

• Private equity and strategic M&A transactions in China 11 Mar 2009. Source: China First Capital. Peter Fuhrman, chairman, China First Capital. 2008 was a year of extremes in China. Extremes of joy and pride during the Beijing Olympics. Extremes of sadness and shock following the Sichuan earthquake. Even the climate reached extremes during China's crippling winter storms early in 2008. Financially, 2008 was also a year of extremes. The stock markets in Hong Kong, Shanghai and Shenzhen rose strongly in the first months of the year, and IPOs were plentiful. By mid-year, the markets began plunging, and IPOs dried up. By year-end, Shenzhen, Shanghai and Hong Kong were all down 60 per cent for the year, according to this report by China First Capital's chairman, Peter Fuhrman.

• Beyond home turf 10 Mar 2009. Source: Asia Private Equity Review (APER). At a time when institutions are assessing their exposure to alternative investment, private equity in Asia displays its magnetism in securing commitments from institutions, at home and abroad, according to this Asia Private Equity Review (APER) article.

• Glowing lights: Asian funds achieve closings against all odds 07 Jan 2009. Source: Asia Private Equity Review (APER). Private equity in Asia showed a measure of resilience, despite enduring a year of extreme turbulence in the financial industry. In the 12 months ending December, $47.8bn of fresh capital is known to have come into the region. This, compared to the $40.9bn for 2007, is a growth of 16.8 per cent, according to this Asia Private Equity Review (APER) article.

• Pressing needs 09 Dec 2008. Source: Asia Private Equity Review (APER). Infrastructure investment in India is expected to slow in the wake of the global credit crunch, according to this Asia Private Equity Review (APER) article. In May 2006, the then Finance Minister of India and new Minister of Home Affairs Palaniappan Chidambaram announced the most ambitious infrastructure development plan ever for his nation. He revealed that the government wanted to attract $150bn of overseas investment over a period of ten years to upgrade India’s roads, power generation and other facilities in order to entice foreign manufacturers. It has become clear that this is going to take longer.

• Time to budget 10 Nov 2008. Source: Asia Private Equity Review (APER). At a time when most investors are tightening their purse strings, the recent $65m commitment led by Actis to 7 Days Inn Group was a resounding pledge of faith to the budget hotel industry in China. It was the largest allocation directed to this sector thus far into the year. The investment also represented a commitment to an industry that is at a cross road, this Asia Private Equity Review (APER) article says.

• Food for Thoughts - China’s food industry heads for massive correction 15 Oct 2008. Source: Asia Private Equity Review (APER). China’s food industry will never be the same, as the current contamination scare continues to widen and consumers are gripped with fear, according to this Asia Private Equity Review (APER) article.

• Private equity investing in India: a survey of private equity investors and their portfolio companies 24 Sep 2008. Source: KPMG. This is an exciting time to be involved in private equity in India. Large global PE investors are either setting up dedicated Indian funds or increasing allocations for Indian investments in their global portfolios. Fund sizes have increased dramatically from $25m to $100m just a few years ago, to between $400m and $1bn. Average deal sizes have also increased to about $50m in 2007, while the average deal was $8m in 2002, according to this KPMG India survey.

• China’s private equity landscape 17 Sep 2008. Source: Weil, Gotshal & Manges. Peter Feist, Anthony Wang, Sidney Qin. Private equity investments in China continue to attract significant attention across the private equity spectrum from global buy-out funds, venture capital funds, regional funds and other investors. Unlike more developed markets where control transactions are often the focus for many investors, private equity investing in China generally takes the form of minority growth capital or pre-IPO investments in businesses where the Chinese founders or management have controlling or significant stakes, according to this article from Weil, Gotshal & Manges.

• The conduit: private equity serves as a link for Taiwanese companies to better access the mainland 17 Sep 2008. Source: Asia Private Equity Review (APER). It will soon be a half year since Taiwan’s Kuomintang returned to governing power over the island. While the dynamic President Ma Yingjeou repeatedly warned that it will be a Herculean task to close the bitter political divide that has separated the island from mainland China for more than six decades, Taiwan’s business community is eager to integrate with their mainland counterparts. As political history in the Greater China region enters a new era, and economic assimilation begins to gather pace, private equity capital is playing a crucial role as a bridge between enterprises on both sides of the Taiwan Strait, according to Asia Private Equity Review (APER).

• Looking to the future: leveraged finance transactions in China 16 Sep 2008. Source: Lovells. Fred Chang and Ying Zhao. This article from Lovells focuses on the acquisition of Chinese listed companies by foreign-organised acquirers, examines why some types of takeovers by foreign entities are possible and looks at alternative methods by which leveraged debt could be employed in the acquisition.

• Quarterly India Venture Capital Report 03 Sep 2008. Source: Dow Jones VentureSource. Venture capitalists were eager to back advertising start-ups in India during the second quarter of 2008, according to the Quarterly India Venture Capital Report from Dow Jones VentureSource. The report found that $89m, nearly 37 per cent of the region's quarterly investment total, went to five advertising/marketing companies, more than any other sector. Overall, India attracted $238m in venture investment with 17 deals closed in the second quarter, a 120 per cent increase over the $108m invested in 12 deals during the same period in 2007.

• Emerging markets private equity fundraising on course to beat 2007 totals: $35bn raised through June 2008 20 Aug 2008. Source: Emerging Markets Private Equity Association (EMPEA). Emerging markets private equity fundraising is on track to significantly beat 2007 totals. Led by Emerging Asia, 104 funds dedicated to investments in emerging markets raised more than $35bn in capital in the first half of 2008, a 68 per cent increase over the amount raised during the same period in 2007, according to the Emerging Markets Private Equity Association (EMPEA). The total value of private equity funds raised in the first two quarters of 2008 exceeds the $33bn raised during all of 2006.

• Connected through private equity funds: investors in Europe connect with India through private equity funds 13 Aug 2008. Source: Asia Private Equity Review (APER). For decades, institutions based in the UK have been the most active investors in India’s private equity scene. The recent string of commitments announced by the CDC Group is further testimony to this, according to Asia Private Equity Review (APER).

• State of the Asian-Pacific Private Equity Markets - SCM's 2008 report 30 Jul 2008. Source: SCM Strategic Capital Management AG. In times of turmoil in the credit and stock markets, institutional investors reevaluate their current investment strategies, looking for further possibilities to reduce risks by diversifying their assets even more. Due to Asia’s exceptional economic growth during the past decade, private equity investments in the region have become a topic of high interest for many investors. The completely revised, second edition of State of the Asian-Pacific Private Equity Markets by SCM Strategic Capital Management AG, Switzerland, presents the results of extensive research on both the overall economic situation of the region and the M&A market in particular.

• Down times: tepid response to PE-backed companies 16 Jul 2008. Source: Asia Private Equity Review (APER). One day, two private equity-backed companies were listed. On 12 June, the Stock Exchange of Hong Kong played host to the listing debuts of Little Sheep Group Ltd. and A8 Digital Music Holdings. The Inner Mongolia-headquartered franchise restaurant operator is backed by 3i Group and Prax Capital. A8 attracted a long list of private equity investors, including IDG Technology Venture Investment, KPCB China, Intel Capital and JAFCO Asia.