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

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• 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.

• 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.

• Asia Private Equity Review Jan 2010 15 Jan 2010. Source: Asia Private Equity Review. In 2006, the then Finance Minister of India, Mr P Chidambaram, was frank when he pointed out that “the most glaring deficit in India is the infrastructure deficit…”. In the following year, his nation began in earnest to pursue improvement of its crippling infrastructure. Its 11th Plan, which will end in 2012, stated that the country would need $500bn to develop its infrastructure. Since 2007, the private equity community has positively responded, and announced the launches of related funds: if all their intended target sizes were to materialise, it would bring in a staggering $16.1bn to help finance infrastructure development in the world’s second most populous nation.

• The social and economic impact of PE in China 15 Jan 2010. Source: European Chamber Private Equity and Strategic M&A Working Group. This first survey on the social and economic impact of private equity in China demonstrates that PE firms provide a strong source of support in helping Chinese companies to grow and contribute to China’s macroeconomic and development goals. PE firms transfer management know-how to businesses in their portfolios, build globally competitive companies, improve corporate governance, develop an innovative private sector, support inland development and foster domestic consumption. The purpose of the survey was to document the above mentioned effects based on facts and figures.

• 2009 IPO market globally and in India, according to Advisory Research Consultancy 11 Jan 2010. Source: Advisory Research Consultancy. Globally, IPO activity picked up in the second half of 2009, driven largely by Asia and South America. These two regions raised $68.6bn (in 11 months ending 30 Nov 2009), accounting for 72 per cent of total global IPO value. The recovery of global IPO activity was most pronounced in Asia, particularly in the Hong Kong and Shanghai markets; these two exchanges together raised $50bn, accounting for 51 per cent of total global proceeds.

• Transfer restrictions – would they hold up in court?, by Nishith Desai Associates 10 Dec 2009. Source: AltAssets. Negotiating a private equity investment in India, particularly the complex ones tend to raise doubts on enforceability. Ultimately, such doubts are cast aside when deal terms are recorded in writing in a formal agreement. But it doesn’t end with having a written contract alone. However exhaustive it may be, according to Nishith Desai Associates.

• Reshaping for future success – what’s next for private equity in India 20 Oct 2009. Source: KPMG, Shorenstein APARC Stanford. Although an emerging economy, India has key institutional similarities to Western countries, notably its developed capital markets and lack of state industrial activism – consequences of decades of democracy and independent entrepreneurship. As a result, India differs significantly from the other developing private equity giant, China, in being well-placed to replicate the Western private equity model and it is not surprising that the private equity industry should have expanded so rapidly in India as in the three years, prior to the credit crunch.

• Building India – Financing and Investing in Infrastructure, according to McKinsey & Company 05 Oct 2009. Source: McKinsey & Company. India’s infrastructure build-out envisages investments of close to $500bn, with $430bn of this in the core transport and utility sectors. About one-fourth of this investment is expected to be met through Public-Private Partnerships (PPP). Successful implementation of this ambitious plan depends on four interdependent factors, namely the creation of adequate projects for tender by government agencies, the uptake of available projects by private sector developers and cash contractors, the financial closure and start of construction, and finally, the execution of projects on-time and within budget.

• 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.