Asia’s Private Equity 2014: In ASEAN, beware “Ruthless” family groups

The following is from private equity international: McKinsey, the consultant firm, says private equity decisively outperforms public equities, but top GPs are struggling to maintain their performance. While GPs globally raised more capital in 2013, fundraising for Asia-Pacific-focused funds dropped dramatically. The value of Asia deals dropped 46% last year. VC fundraising was down 50% in 2013 due to a lack of exits discouraging LPs. Ten funds accounted for around 70 percent of the capital raised in Asia in 2013. But most Asia GPs still aspire to Fund III, with hree-quarters of Asia-based fund managers have not yet raised the key third fund, PEI’s data shows. Carlyle raises $1.6bn for Asia. KKR expects to close $1bn in Asia deals, where Asia Pacific now makes up almost half of the firm’s dealflow. Under- and over- estimation of key factors are why PE has delivered weak returns in India, according to a Siguler Guff report. As Apollo and ICICI gear up to close their India vehicle, interest in Asian distressed assets appears to have dwindled. Korea to relax rules for PE-backed M&A. The new government measures to smooth $9.3 billion in asset sales comes amid corporate distress. HKVCA Forum: Families ‘ruthless’ in SE Asia and GPs must be wary of competing and partnering with the region’s powerful family groups. On innovation and PE, thinking differently about innovation can help drive value creation in private equity, says Fahrenheit 212’s Pete Maulik. Standard PE fund model `unworkable’ in Asia and unconventional fund structures are the best way to ride Asia’s volatility, according to one Hong Kong-based firm.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s