AVCJ Private Equity & Venture Forum 2012 AVCJ Private Equity & Venture Forum 2012

Japan 13 - 14 September 2012 13 - 16 November 2012 www.avcjjapan.com www.avcjforum.com ASIAN VENTURE CAPITAL JOURNAL

Asia’s Private Equity News Source avcj.com August 21 2012 Volume 25 Number 31

Editor’s Viewpoint Focus Media draws the spotlight back to take-private transactions PRIVATE EQUITY ASIA Page 3 News Actis, CalPERS, Carlyle, CDH, CITIC Capital, FountainVest, General Atlantic, Goldman, GGV, KKR, MBK, NEA, Origo, STIC, Vision Knight M&A ASIA Page 4 Deal of the week Clove Capital shows LPs a lucrative energy exit Page 10 Focus Korea leads Asia with string of blockbuster private equity deals Page 14 Hybrid strategies AVCJ Research Does private equity and convergence make sense in Asia? Page 7 Data f ile Page 15

Deal of the Week Focus

Delivered from debt The Qianhai gambit Quasi-secondary deal for Super A-Mart Page 10 China to offer RMB fundraising via HK Page 11 YourYour NewNew CapitalCapital PartnerPartner UOB Mezzanine Capital - your preferred alternative capital provider

We deliver flexible capital solutions to support your transaction and enhance your returns. Our team has in-depth understanding of Asian markets and their regulatory environments. Your corporation will be able to leverage the extensive network and resources of the UOB Group to support your corporation's strategic plans. We have the capacity to provide solutions in local currencies and US dollar in most jurisdictions in Asia, including China.

United Overseas Bank is a leading bank in Asia. It provides a wide range of financial services through its global network of more than 500 offices in 19 countries and territories in Asia Pacific, Western Europe and North America, including banking subsidiaries in Singapore, Malaysia, Indonesia, Thailand and mainland China.

To find out more about how we can meet your financing needs, please contact:

Yeo Wee Yap Tel: +852 2103 4288 Fax: +825 2147 3377 Email: [email protected]

Mah Liang True Tel: +65 6539 1209 Fax: +65 6535 2902 Email: [email protected]

For more details, please visit: uob.com.sg/corporate/mezzanine/overview.html

United Overseas Bank Limited Co. Reg. No. 193500026Z Editor’s Viewpoint [email protected] ASIAN VENTURE CAPITAL JOURNAL

Managing Editor Tim Burroughs (852) 3411 4909 Senior Editor Brian McLeod (1) 604 215 1416 PRIVATEAssociate EQUITY EditorASIA Susannah Birkwood (852) 3411 4908 Staff Writer Take-privates, Alvina Yuen (852) 3411 4907 Creative Director Dicky Tang M&A ASIA Designers Catherine Chau, Edith Leung, Mansfield Hor, Tony Chow part 34 Senior Research Manager Helen Lee Research Manager Alfred Lam Research Associates One week, two private equity-backed tanked; the company denied the claims, and the Kaho Mak, Jason Chong management buyout offers for Chinese stock largely recovered. Circulation Manager Sally Yip companies listed on NASDAQ, and a lot of fuss Focus Media isn’t the first to be placed Circulation Administrator from (some, but not all) media outlets about how under such scrutiny and respond with a PE- Prudence Lau this is the start of something big. It’s not. backed MBO. Harbin Electric (completed), Fushi Senior Manager, Delegate Sales The $3.5 billion MBO touted for Focus Media Copperweld (pending approval), China Fire & Anil Nathani takes the China take-private trend up a notch Security (completed) and CNinsure (terminated) Senior Marketing Manager – but it’s not new. And given the amount PE have also had questions asked of them. Stacey Cross investors have talked about these opportunities According to Roth Capital Partners, 37 China Director, Business Development in recent months, not to mention the amount take-privates have been announced, completed Darryl Mag I’ve written about them, it shouldn’t be that or terminated since 2010. PE investors are Manager, Business Development surprising. And, yes, the complications and risks involved in four of the 14 completed deals and Samuel Lau inherent in such transactions remain the same. four of 18 that are ongoing. Quality inevitably Sales Coordinator On a broader level, depressed public market varies and this affects the chances of a deal Debbie Koo valuations create a natural inroad for private going through and then achieving the ultimate Conference Managers Jonathon Cohen, Zachary Reff, Sarah Doyle equity. According to AVCJ Research, investment objective of a relisting in Asia, a feat that so far Conference Administrator has slowed throughout Asia over the last 18 none of these companies has achieved. Amelie Poon months, reaching a three-year low of $26.2 billion Focus Media is large, well known and Conference Coordinator Fiona Keung, Jovial Chung in January-June 2012, but buyouts and PIPE deals profitable. It was taken public by credible Publisher & General Manager are not responsible. investors (CDH Investments, Draper Fisher Allen Lee These two categories between them racked Jurveston, 3i Group, and others) and is poised to Managing Director up $16 billion in transaction value in the first half be taken private by credible investors (The Carlyle Jonathon Whiteley of 2011 (47% of the regional total), $21.8 billion Group, CDH, China Everbright, CITIC Capital and Chairman Emeritus in the second half of 2011 (60.8% of the total), FountainVest Partners), supported by credible Dan Schwartz and $16.9 billion in the first half of 2012 (64.6% financiers. Crucially, the company is incorporated of the total). By comparison, growth deals have in the Cayman Islands, a jurisdiction regarded slumped from $12.8 billion to $8.3 billion to $7 favorably by the Hong Kong Stock Exchange. Incisive Media billion over the same period. Private equity firms On the flip side, a company might be 20th Floor, will place capital where they perceive value and incorporated in Nevada, and re-domiciling to Tower 2, Admiralty Centre 18 Harcourt Road, feel they can wield sufficient influence in realizing Cayman could incur a US tax bill large enough Admiralty, Hong Kong T. (852) 3411-4900 it. Public market transactions will continue to play to make the whole exercise financially unviable. F. (852) 3411-4999 a large role as long as valuations allow it. It might also be unprofitable, which would fall E. [email protected] URL. avcj.com Chinese companies listed in the US have been foul of Hong Kong’s merit-based review system. hit particularly hard after financial inconsistencies Even if structural challenges are overcome, does Representative Office Room 1805, Building 10, were uncovered in filings made by several firms the company appeal to investors in Asia. A lack Jianwai SOHO, 39 East 3rd-Ring Road, that went public via reverse mergers. Short sellers of brand-name recognition, a puzzling business Chaoyang District, Beijing 100 022, China have also launched attacks on a number of these model and Chinese policy bank backing are T. (86) 10-5869-6205 F. (86) 10-5869-7461 firms. Plummeting valuations have prompted unlikely to inspire confidence. E. [email protected] management teams to consider going private As many investors have discovered, it is and relisting in Asia. dangerous to pick winners – or trends, for that The Publisher reserves all rights herein. Reproduction in whole or The Focus Media MBO has attracted attention matter – without proper due diligence. in part is permitted only with the written consent of AVCJ Group Limited. not only for its size, but also because the ISSN 1817-1648 Copyright © 2012 company has been targeted by Muddy Waters, arguably the most notorious/successful of the shorts. It accused Focus Media of overstating the Tim Burroughs number of screens it uses to display ads in China Managing Editor and of overpaying for acquisitions, and the stock Asian Venture Capital Journal

Number 31 | Volume 25 | August 21 2012 | avcj.com 3 News

Australasia GGV receives commitments slightly, according to the Emerging Markets of $509m for fund IV Private Equity Association. Australia’s QIC to pick up GGV Capital, the US and China-focused venture Adveq establishes third capital investor, has raised $508.9 million for its Swedish PE interests fourth fund. In addition to the main fund, the VC Asia office Queensland Investment Corporation (QIC) is firm has attracted $10.8 million for a side vehicle Adveq has opened an office in Hong Kong, its reportedly set to buy almost 10% of a EUR1.5 known as GGV Capital IV Entrepreneurs Fund. third in the region. The move comes after the billion ($1.9 billion) portfolio of private equity According to regulatory filings, there are 54 LPs in asset manager announced plans in January to interests being sold by Länsförsäkringar. The GGV Capital IV and 89 in the side fund. increase its investment in China to RMB3.5 billion Swedish insurer is in final talks with potential ($554 million) over the next two years. The global bidders over what would be one of the largest investor first opened an Asia office – in Beijing – divestments by a European institution and the in 2008. largest-ever by a European insurance company. Carlyle picks up 14% of GE, VCs target Australia, NZ Meinian Onehealth cleantech start-ups Global private equity major The Carlyle Group General Electric (GE) has teamed up with five has acquired a 13.5% stake in Meinian Onehealth venture capital firms in Australia and New Healthcare, the largest private provider of Zealand on a $10 million fund that will support preventive healthcare check-up services the development of clean technology. Entries in China. Investing via its RMB fund Beijing are welcomed from businesses, entrepreneurs, Carlyle Investment Centre, Carlyle will attempt innovators and students with ideas for low to leverage its healthcare industry expertise carbon solutions and technologies. The venture GGV, formerly known as Granite Global through this transaction. capital partners are Southern Cross Venture Ventures, was founded in 2000. It last came to the Partners, M.H. Carnegie & Co, Cleantech Ventures, market in early 2006 with Granite Global Ventures FountainVest backs LJ CVC, and Greenhouse Cleantech. III, which reached a first close of $400 million within 10 months and achieved a final close of privatization $610 million in March 2008. Fountainvest Partners, the -based Greater China private equity fund founded by former Goldman Sachs and Temasek dealmaker Frank Tang, has KKR invests $30m in received $60 million in commitments for a $200 teamed up with Yu-Chuan Yih, CEO of Nasdaq- million fund targeting cleantech companies. listed jeweler LJ International, to take the fashion retailer CFO Niklas Ponnert said that the vehicle aims for company private. The two investors have agreed KKR has committed $30 million in Novo, a fashion a first close by the end of the year. Launched in to acquire all of the outstanding ordinary shares apparel retailer focused on the urban youth September 2011, the vehicle - China Cleantech of the jeweler not currently owned by Yih. demographic in China. The investment, which Partners - will make 10-15 investments. was channeled via KKR’s China Growth Fund, SBI teams up with China’s has already enabled the company to expand its VC firm leads $6m App nationwide store network and pursue licensing Yidian to lauch PE fund agreements with international fashion brands. Annie Series B round SBI Holdings has partnered with China’s Yidian App Annie, the service provider of app store Holdings to launch a private equity fund that CalPERS invests $530m in analytics and market intelligence for the global will invest in the technology, media and telecom app economy, has raised $6 million in Series (TMT) sector. The initial fundraising target is China property funds B financing led by Greycroft Partners. China’s RMB400 million ($62.9 million). Each party has The California Public Employees’ Retirement IDG Capital Partners, the lead investor in the committed RMB100 million to the Yidian-SBI System (CalPERS) has committed $530 million to previous funding round, Infinity Venture Partners, Information Industry Fund. SBI is expected to two China-focused real estate funds run by ARA e.ventures, Kii Capital and angel investor Jarl participate through the Qualified Foreign Limited Asset Management, a Singapore-listed affiliate of Mohn also participated. Partnerships (QFLP) program. The remaining Cheung Kong Holdings. The pension system will capital will come from local government and invest $480 million in ARA Long Term Hold Fund, China slowdown hampers private investors. which targets high quality office buildings and EM fundraising retail malls in China and Hong Kong. PCCW to invest $25m in Fundraising by private equity firms focused on Vision Knight Capital Origo secures $60m for emerging markets reached $17.2 billion in the first six months of 2012, or nearly half of the $38.5 Hong Kong telecom operator PCCW may invest China cleantech fund billion raised in 2011 as a whole, with a spike in as much as $25 million in Vision Knight Capital, Origo Partners, a London-listed private equity emerging Europe counterbalancing a slowdown a private equity fund co-founded by David Wei, investor focused exclusively on China, has in China. However, investment activity cooled former CEO of Alibaba.com. Vision Knight Capital

4 avcj.com | August 21 2012 | Volume 25 | Number 31 News

Fund I is seeking as much as $300 million. Current Focus Media receives $3.5b Lok Capital ups stake in LPs include family offices of entrepreneurs in China, Hong Kong, Singapore, Taiwan and Europe buyout offer from PE firms Ujjivan MFI - including Jack Ma, founder of Alibaba Group The CEO of US-listed display advertising provider Lok Capital has reportedly upped its stake in and Wei’s former boss. Focus Media has teamed up with a group of India’s Ujjivan Microfinance by acquiring the private equity firms and made a $3.5 billion 7% held by microfinance investor Bellwether. offer to take the company private. If the deal Bellwether, which invested in the MFI in 2005, North Asia goes through, it would be China’s largest ever reaped returns of around 24% from the deal. leveraged buyout and Focus Media would MBK agrees $1.1b deal for become the biggest Chinese company to delist PE exits in India down by from a US stock exchange. Korea’s Woongjin Coway The bidders - CEO Jason Jiang (pictured), 90% in second quarter MBK Partners has agreed to pay KRW1.1 trillion The Carlyle Group, FountainVest Partners, CITIC India private equity exits fell 89% year-on-year to ($1.1 billion) for a 31% stake in Woongjin Coway, Capital Partners, CDH Investments and China just $108 million in the second quarter. This came the water purifier business of South Korean Everbright - have made a non-binding offer of from 12 transactions, down 33%, according to conglomerate Woongjin Holdings. It is the $27 per share, which represents a premium of a report published b PricewaterhouseCoopers country’s joint-largest private equity transaction 16% on the company’s closing price on Friday. (PwC). The top three exits comprised 70% of this year and brings to an end a confusing sale The news comes in the face of the poor the total value generated during the period. process that stretches back six months. North market performance of many US-listed Chinese Healthcare and life sciences saw the most activity Asia-focused MBKwill pay KRW50,000 per share. stocks. Focus Media peaked at close to $65 in late by value, at $39 million. 2007 but subsequently entered a drastic decline Goldman sells Japanese to around $6 in 2008. More recently, it has come Actis completes Dalmia contractor for $636m under attack from short sellers. Bharat bulk sale Goldman Sachs has sold Japanese contractor Actis is said to have exited its 5.5% stake in Fujita Corp to local home builder Daiwa Dalmia Bharat Sugar & Industries - formerly House Industry for JPY50 billion ($636 million), Dalmia Cement Bharat - for INR8.27 million ($1.5 representing an exit from one of its longest million). The exit was made through a bulk sale. investments in the country. Between 2005 and Actis invested around INR1.15-1.2 billion in the 2008, the US bank invested around JPY45 billion company in 2005. In 2010, it demerged of its in the company via a Goldman-managed private cement, power and refractory businesses to a equity fund, over two stages. new entity. STIC-led group closes in on General Atlantic exits Korean weapons maker Infotech Enterprises A consortium formed by STIC Investments Actis buys 10.8% stake in General Atlantic Partners – through its entity and brokerage Hana Daetoo Securities has GA Global Investments – has sold 11.7 million been selected as the preferred bidder for a Sri Lanka hospital chain shares, or a 10.48% stake, in Infotech Enterprises stake in South Korea’s LIG Nex1. The weapons Actis has purchased a 10.8% stake in Sri Lanka’s to Cyprus-based company Gagil FDI for INR2.01 manufacturer is offloading a 49% interest worth Asiri Central Hospitals for LKR604 million ($4.5 billion ($36.2 million). GA Global Investments around $440 million. Four local private equity million). The emerging markets-focused PE firm - which originally held 12.38% in Infotech firms and a listed European defense company acquired 2.4 million shares in the Colombo- Enterprises - will own 1.9% after the transaction, reportedly submitted bids earlier this month. listed company from Softlogic Holdings, according to a filing to the Bombay Stock Commercial Bank of Ceylon and Pan Asia Banking Exchange. South Asia Corporation, paying LKR250 per share. Goldman, NEA invests in Peepul Capital makes two Nova Medical Centers KKR fund among AIFs to investments in Chennai Goldman Sachs and New Enterprise Associates win India approval Peepul Capital, an India-focused private (NEA) have committed INR 3 billion ($54 million) KKR’s India Alternate Credit Opportunities Fund is equity firm, has invested $15-25 million each to Nova Medical Centers, an Indian surgical among seven funds (AIFs) in two Chennai-based companies - Consul care and fertility clinics company. Goldman will that have been approved by the Securities and Consolidated, a power solution company, and contribute INR 2.2 billion and NEA will make Exchange Board of India (SEBI). The other entities Cura Healthcare, a radiology equipment maker. an add-on investment of INR 800 million. Nova permitted to operate under the AIF route are IFCI Both investments were channeled from Peepul develops, acquires and operates day and short- Syncamore India Infrastructure Fund, Utthishta Capital Fund III. Vijay Rajagopal, investment stay surgical centers in partnership with surgeons Yekum Fund, Indiaquotient , manager at Peepul, said that the private equity across India and the Middle East. Its strategy Forefront Alternate Investment Trust, Excedo player is betting on the growth platforms of both is to provide high quality surgical care that is Realty Fund and Sabre Partners Trust. companies. affordable and conveniently located.

Number 31 | Volume 25 | August 21 2012 | avcj.com 5 Customized Research Report Asian Private Equity Data Made Simple

AVCJ Research can provide your firm with timely and accurate research support to help you simplify and expedite your workflow. We conduct in-depth research and provide insightful analysis in a bespoke report that fully meets your data requirements.

AVCJ’s industry standard data is used by the world’s leading firms in their fundraising, investor relations communications and deal due diligence activities. AVCJ Customized Data Service includes:

✔ Pan-Asian Industry Reviews/Regional Repots – timely updates ✔ Specific industry and financing stage research ✔ Comprehensive statistics on investments and funds ✔ Exits strategic analysis ✔ Market peers comparison

To understand how AVCJ Research can help you with your data needs, please call: 852-34114956 or email [email protected]

avcj.com Cover Story [email protected] PE firms hedge their bets Numerous private equity and hedge funds are pursuing alliances with one another in Asia. Could a multi- strategy approach be the golden strategy for the region’s investment environment?

Is it enough to be a pure-play private to work in collaboration with management. For Baran argues that we could also start to see equity or hedge fund in Asia? A handful of regular hedge funds – not ourselves – it’s almost Asian PE firms attempting to evolve into broader- investment firms think not. The likes of The an impossible task.” base asset managers, given the particular Rohatyn Group, D.E. Shaw and TPG Capital have For global PE firms that are now publicly opportunities available in the region. long recognized the shortcomings of focusing listed, there is also a broader imperative: “Private equity managers are going to have on one particular asset class and adjusted their diversifying their business away from pure to change their stripes a little bit if they can. The investment strategies to offer both hedge fund corporate private equity, which can generate conditions within Asia are just different from the and private equity strategies under one roof. inconsistent income streams, and seeking greater US and Europe and you just can’t transport your Other Asia-based managers could be about to exposure to more liquid public equities. In June, strategy here and think it’s going to work,” he follow suit. KKR agreed to buy Prisma Capital Partners, a US- says. “They will have to become more flexible in Convergence is perhaps to be more expected based hedge fund-of-funds, while last year The how they establish and unwind positions when where hedge funds are concerned, given that Carlyle Group bought a 55% stake in Emerging they’re working into a situation.” their industry that has suffered stunted growth Sovereign Group, a US-based emerging markets- As more firms make efforts to tap Chinese over the last few years. Indeed, Hong Kong-based focused hedge fund manager. LPs, increasing pressure to offer greater liquidity Senrigan Capital, in which The Blackstone Group upped its investment by $50 million last month, is one of just five or six hedge funds in Asia to amass assets worth $1 billion or more since 2008. What do LPs think? Asia fund returns have also been lackluster, particularly those for equity long-short strategies, hether more Asia-focused private equity and hedge funds enter into alliances as the which ended 2011 down 13.7%. The realization Windustry matures depends heavily on LP sentiment. Fund managers are far from aligned at that they can’t consistently generate the 15- present in their perception of what LPs think, however. 20% returns their investors demand means has “Investors are looking for a hedge fund. They’re not looking for a crossover,” David Baran, prompted several funds to branch into other co-CEO at Japan-focused Symphony Financial Partners, tells AVCJ. “Conversely, the PE investors – areas. foundations, endowments, universities – are looking for PE guys.” For that reason Baran prefers not “cubby-hole” Symphony’s investment strategy into either Crossing boundaries private equity or hedging, as he believes that trying to market a hybrid vehicle still presents a Symphony Financial Partners is one example of challenge. this. Though closer in nature to a hedge fund Other industry participants, though, have noted a more receptive response from LPs. than a private equity player, the Japan-focused According to Michelle Leung, a partner at Lunar Capital, most investors are open-minded firm runs a hybrid model that crosses into about funds with different strategies. As long as the managers are good fiduciaries, with good traditional PE territory on a number of levels. governance and the ability to manage conflict, many consider multi-strategy funds in a positive Symphony invests in publicly-listed Japanese light. “As long as the lines are clearly delineated, having cross-investing between funds or having firms and, like private equity, prefers to take one manager looking at different strategies is probably a good thing,” she says. “It really depends sizable stakes in these companies – its record so on how good the managers are.” far is a 50% equity stake. It also offers its investors Given the disagreement, it may be that the LP opinion depends on the type of investors limited liquidity, although rather than being funds are dealing with. Some institutional investors are likely to show more resistance towards locked in for a 10-year fund lifespan, LPs have a managers offering more than one strategy due to the highly compartmentalized nature of their mere 2-3 year lock-up. asset allocation strategies. According to David Baran, Symphony’s Investors such as the California Public Employees’ Retirement System (CalPERS), for example, co-CEO, this strategy makes sense because of will almost certainly have infrastructure defined as a separate asset class to private equity and the importance of relationships in Asia, and in hedge funds and will have dedicated teams for each one. They are unlikely to be impressed by a Japan in particular. Adopting a typical finance- fund manager offering more than multiple products. orientated hedge fund approach can often leave “Investors like family offices and high-net-worth individuals, however, might be interested to managers out in the cold. build a relationship with a firm that offers different investment strategies and asset classes,” points “It’s more about influencing and building trust out Johan Bastin, CEO of infrastructure fund manager CapAsia. and creating a relationship, rather than looking Asian institutions – such as Government of Singapore Investment Corporation and Temasek – at the pure economics and deciding what to do which have started to pursue a more opportunistic and less ratio-based style of investing, could that way,” he explains. “You have to be adaptive also find their interest piqued. and work out how to get around it. You have

Number 31 | Volume 25 | August 21 2012 | avcj.com 7 Cover Story [email protected]

“Hedge fund managers have built platforms Selected co-investments between PE and hedge funds that are robust in terms of the infrastructure Date Investee Investors and processes, and feel that in order to grow as a fund manager, they need to add other asset May-09 Indiabulls Real Estate Farallon Capital; Fidelity International; HSBC; Moon Capital Management; Morgan Stanley; Och-Ziff; TPG Capital classes that would benefit from the economies of scale of using the structures and market Nov-07 Glorious Property D. E. Shaw; Deutsche Bank ; Goldman Sachs reputation that they’ve built,” adds Johan Bastin, Apr-12 Haitong Securities D. E. Shaw ; Oman ; PAG Capital; SBI Holdings CEO of CapAsia. Feb-08 Sophia Power Farallon Capital; LNM Internet Ventures Since going under the TRG umbrella, CapAsia Sep-11 Asia Netcom Corp. Ashmore Investment; Clearwater Capital Partners; Spinnaker Capital has been able to secure commitments for its latest fund from a number of TRG’s own investors Jul-07 New China Life D. E. Shaw; Khazanah Nasional; MBK Partners and now shares key functions such compliance, Nov-07 Reliance Telecom DA Capital; Fortress Capital; GLG Partners; HSBC; New Silk Route Advisors; IT and risk management services with its new Infrastructure Soros Fund Management parent. In 2011, TRG also acquired Asia-focused Nov-07 China Railway Group CIC; China Life Franklin Asset Management; GIC; Och-Ziff; Rocket Capital real estate investor ARCH Capital. Feb-08 China Rongsheng D. E. Shaw; Goldman Sachs; New Horizon Beyond co-investment, or out-and-out Heavy Industries Group acquisition of a private equity or hedge fund, a May-07 GCL Silicon Technology Balderton Capital; CDH.; D. E. Shaw; Bank; Milestone Capital; New further way in which these entities are working Horizon; Trust Bridge Partners together is in sharing advice and ideas. Lunar Source: AVCJ Research Capital has done this on numerous occasions, after having been approached directly by a could also cause some to offer shorter fund lock- because private equity investors in the region hedge fund or when LPs that have invested in periods. are not short of dry powder and so there isn’t the hedge funds ask for views on specific sectors. In addition to asset managers expanding funding gap that hedge funds might otherwise “If some of our LPs had invested in the listed their offerings into each other’s territories, step into.” sports apparel space in China, they’d want us to another potential way for PE and hedge funds help with due diligence on the company, or offer to collaborate is through co-investment. Access to expertise our views on the retail sector in China because Blackstone’s increased exposure to Senrigan Another factor is that hedge funds traditionally of our investment in our baby clothing business, Capital – which followed its $100 million seeding operate as smaller operations than PE firms, so Yeehoo,” says Leung. “We haven’t monetized this of the firm of 2009 and a later investment of $50 they are unlikely to have invested in building by investing in public securities ourselves but the million – gained the asset manager the right to sufficient teams, nor have the expertise needed skillset seems to be quite valuable and applicable co-invest with Senrigan on a number of projects. for successfully sourcing and executing private to a hedge fund or an investor who’s looking at Though Blackstone’s investment was made via transactions. the more liquid space.” its fund-of-funds unit, there is speculation that A need to access this manpower and its PE vehicles could invest alongside the hedge expertise could conversely be what causes Diverging strategies? fund, which could prompt other PE shops to seek hedge funds to seek co-investments with private Though some predict that as the market matures similar opportunities. equity. Despite being a firm which is heavily in Asia, each asset class will focus more on Evidence of this happening so far is thin focused on China’s mid-market space – and their own mandates and the blurred lines and on the ground, however, with cornerstone rarely entering into listed deals – Lunar Capital cross-investing between them will lessen, there’s investments and PIPE deals constituting the has received numerous approaches from hedge a consensus that the future of multi-strategy occasional exception to this. funds. Partner Michelle Leung believes that this is fund managers will ultimately depend on LP In April, PAG and D.E. Shaw – both of which partly motivated by the difficulties hedge funds sentiment. If investors do end up favoring the run both private equity and hedge fund vehicles experience, particularly those based in Hong collaborative approach – possibly seeing it as an – stood alongside each other as cornerstones Kong or New York, in securing high quality due advantage to have more managers looking at the in the IPO of Haitong Securities, China’s diligence on Chinese companies. same sectors in different ways – then the hybrid second-biggest brokerage by assets. In March, “Hedge funds would benefit from being fund managers could find that they’ve hit on both hybrid PE-hedge fund Hillhouse Capital able to tap into the resources that a PE fund has, something special. Management and Och-Ziff Capital Management being local, on-the-ground and operationally- How this strategy will be exploited down bought $80 million of shares in the IPO of Far focused,” she says. “This is much more the case the line remains to be seen, but CapAsia’s Bastin East Horizon. And last November, MBK Partners in this market than any other, because in a more believes that the logical next step would be for invested $100 million in the IPO of New China mature market you could rely on publically those “one-stop shops” to sell their capabilities as Life Insurance, also alongside D.E. Shaw. available information for your due diligence.” a fund manager via an overlay fund – combining “In Europe and the US there have been a A desire to attain private equity-level due liquidity and long-term returns. number of hedge funds that have for some time diligence in Asia may offer one explanation “If they have sufficient scale, a fund manager been successful in pursuing M&A strategies for The Rohatyn Group’s (TRG) acquisition with multiple strategies may market an overlay involving both public and private companies,” of Singapore-based PE infrastructure fund that could invest in private equity, says Simon Weller, a Hong Kong-based corporate investorCapAsia earlier this year. TRG now holds infrastructure or hedge funds so that investors partner at Freshfields. “Out here in Asia, however, a 60% stake in CapAsia, having bought the don’t have to make this choice,” he predicts. we haven’t seen as much in the way of hedge shareholding from CIMB, Malaysia’s second- “That would attract smaller pension funds, family fund activity on the M&A front. This may be partly largest bank. offices and high-net-worth individuals.”

8 avcj.com | August 21 2012 | Volume 25 | Number 31 © 2012 Bloomberg L.P. All rights reserved. 49517532 0712 deal of the week [email protected] / [email protected] Quadrant in quasi-secondary retail deal

Does Quadrant Private Equity’s and Partners Group. Together to its track record in retail investments. investment in Super A-Mart and Barbeques they own 35% of the holding company, with Ironbridge acquired Barbeques Galore, a Galore constitute a quasi-secondary transaction? management taking the remainder. retailer of barbeques and barbeque accessories Certainly, it combines two prevalent Quadrant’s investment, which has allowed in Australia and the US, via a take-private of the themes in Australian private equity as GPs face Government of Singapore Investment NASDAQ-listed parent company in 2005, paying a reckoning for investments made circa 2006. Corporation (GIC) to exit from Super A-Mart, A$88 million. Super A-Mart, a leading discount In many cases, either the fund is reaching the values the combined entity at around A$500 furniture and bedding retailer, was added to the end of its cycle and capital must be returned to million including debt. PE firm’s portfolio one year later through a A$478 investors, or the financing “A lot of people are looking million management buyout. package is close to expiry and at bringing equity into strong Although merged at the back end and with requires renegotiation. This businesses so they can reduce some room for operational synergies – one third has led to a rise in secondary debt,” says Marcus Darville, of Barbeques Galore’s sales are from outdoor exits to rival PE firms and a a director at Quadrant. furniture, which is also a significant area for Super host of recapitalizations, often “This one is a bit different A-Mart – the companies will continue to operate involving new equity partners. because it’s somewhere in as distinct retail entities. Quadrant is keen to Super A-Mart-Barbeques between a secondary deal establish Super A-Mart, by far the larger of the Galore is an unusual mixture. Furniture: A$12b business in Oz and a recapitalization. It is also two assets, as a national player in Australia’s A$12 The two assets have been unusual in that very few retail billion furniture industry. There are 34 outlets folded into a single holding company, of which deals are being done right now because putting at present, two-thirds of which are located in Quadrant controls just under 60%, having together fresh financing is difficult.” Queensland, and the plan is to reach 100. injected A$130 million ($136 million) and secured Five senior lenders and two mezzanine “There aren’t many retail businesses in a new financing package. Ironbridge, which led lenders have come on board, five of which Australia with this kind of rollout potential,” the original buyouts of the companies, is rolling participated in the previous financing package. says Darville. “The format works outside of over its equity stake alongside co-investors Darville credits Quadrant’s ability to raise the debt Queensland, so there is a long way to go.” Clove sees 20x return on Philippines oil deal

The Philippines has long been process of raising its maiden fund, which targets well as helping VenturOil negotiate a consortium perceived as a black hole for private equity. Clove growth deals across natural resources, agriculture, agreement with an oil services operator. Capital, which spun out from EMP Daiwa Capital logistics and infrastructure in Southeast Asia with The shareholding structure represented Asia, begs to differ and now it has evidence to a view to exiting to international investors. another challenge. Given that only local support its case: a 20x return on an investment in The fund has a target of $250 million and is companies qualify for breaks such as the Filipino Philippines oil exploration firm VenturOil, which expected to reach a first close later this year or in Participation Incentive Allowance, which equates was exited to Peak Oil & Gas last week. early 2013. to 7.5% of a project’s gross oil revenue, Clove had Clove’s leadership team – Bharat Parashar, “We needed to show an exit to our LPs,” Tan, to create a framework through which VenturOil Darren Tan and Chung Min Pang – brought the partner at Clove Capital, could be recognized as deal with them from EMP Daiwa in 2010. The tells AVCJ. “A lot of potential a Filipino company. The investment dates back to 2008, when VenturOil investors want to see our solution was to team up came up with the idea to redevelop SC6 Cadlao, ability to exit an investment with a local partner that took an oilfield that had been plugged since 1992. in Southeast Asia, given the 60% of the voting rights Parashar and Tan then worked with VenturOil on perception that these tend to in VenturOil, while Clove a deal structure and EMP Daiwa subsequently be slightly more challenging retained a 95% economic committed up to $10 million in VenturOil markets to operate in.” interest. Philippines through its wholly-owned special Reaching the exit was “It took us nearly three purpose vehicle Energy Best. VenturOil has a 20 % not easy, though. During the VenturOil: Tough to structure years to develop SC6 into stake in SC6. four-year holding period, Tan a tangible investment The exit to Peak Oil and Gas Singapore – a and Parashar had to work their way through a opportunity,” Tan adds. “We prefer to create subsidiary of Australia-listed Raisama Energy heap of bureaucratic red tape in order to get the investment opportunities instead of looking and a consortium partner of VenturOil in the project off the ground. This included persuading at bid-out deals, as we feel that by creating, SC6 redevelopment – comes at an opportune the Philippines Department of Energy to grant managing and operating our investments we time for Clove. The private equity firm is in the various licenses and regulatory incentives, as have more control on our returns.”

10 avcj.com | August 21 2012 | Volume 25 | Number 31 Focus [email protected] Qianhai offers RMB funds fast track Renminbi-denominated private equity funds will get special dispensation to raise capital in Hong Kong through a new pilot project in . As ever, the devil is in the detail, which has yet to be fully explained

The growth of Hong Kong’s renminbi July, John Zhao, CEO of Hony Capital, told media Another issue that has still to be resolved pool has been remarkable. Individual banking that the company might raise its next renminbi- is whether private equity funds registered in services in Chinese currency have been available denominated fund in Hong Kong via the Qianhai Qianhai qualify for local treatment. Earlier this for more than eight years, but the liberalization program. year, responding to an inquiry regarding The drive gained momentum in the latter half of Hong Kong’s geographical and cultural Blackstone Group’s Shanghai-based vehicle, the that period. Hong Kong witnessed the rollout of proximity to Shenzhen, not to mention the National Development and Reform Commission renminbi bonds and trade finance facilities, while established commercial ties between the two said that foreign-invested renminbi funds would local investors treated the currency as a means of cities, is likely to offer comfort to GPs and LPs. not be able to circuit the regulatory bureaucracy leveraging appreciation against the US dollar. However, this doesn’t necessarily mean Hong that slows down transaction approvals and Chinese currency deposits in the territory Kong investors will back mainland managers. restrictions on target investment areas that apply reached RMB63 billion ($9 billion) in 2009. As Firstly, the high net worth individuals (HNWIs) to US dollar vehicles. So what if the capital comes of May, the total stood at RMB670 billion. In that are behind the rise of renminbi funds are from Hong Kong via Qianhai in renminbi? terms of Hong Kong’s wider banking industry, far fewer in Hong Kong than mainland China. the renminbi pool remains relatively small and According to the most recent edition of the Local treatment? illiquid, despite its rapid growth. According to a source close to the Qianhai The latest initiative to internationalize the government, the objective of the program renminbi lies about one hour’s drive from “If we are just allowed is similar to that of Shanghai’s Qualified Hong Kong in Qianhai, a development zone in Foreign Limited Partnerships (QFLP) scheme: southern Shenzhen that has been designated to raise offshore encouraging easier currency conversion, a laboratory for financial innovation. Capital renminbi from local nothing more. Further details are expected to be will flow more freely across the border, and this announced towards the end of the year, but any includes allowing Qianhai-registered private Hong Kong investors, it offshore renminbi from Hong Kong is likely to be equity firms raise renminbi-denominated funds considered overseas capital. in Hong Kong. will be a much smaller “There are two separate issues here: foreign Suddenly, those RMB670 billion in deposits direct investment restrictions on foreign-invested universe” – Brooke Zhou have become a prime target for mainland private equity funds and foreign exchange GPs keen to access a wider array of potential control on such funds,” says Sean Tai, a Shanghai- investors. But are they a realistic target? Capgemini-Merrill Lynch Asia Pacific Wealth based partner at Paul Hastings. “I expect funds Dean Moroz, Hong Kong-based legal counsel Report, Hong Kong had 511 people with registered in Qianhai will still be categorized at Ashurst, says no. “I would not anticipate investible assets in excess of $1 million in 2010; as foreign-invested even if they are allowed to this being a major development in relation China had 2,657. Secondly, Hong Kong’s HNWIs accept renminbi channeled from Hong Kong. to renminbi funds,” he tells AVCJ. “The pool of are more sophisticated and have a much wider – As a result, GPs may sometimes only target local investors from whom renminbi can be raised and international – choice of investment options investors to enjoy domestic treatment.” seems to be limited to Hong Kong and I do than their mainland counterparts. It is not purely Despite these potential limitations, financial not expect such funds to be treated as wholly a case of PE, property equities or bank deposits. innovation is just one aspect of Qianhai, which domestic funds in the coming 5-7 years.” It is worth noting that the traditional sources the Beijing wants to turn into a global services of private capital, institutional investors such center by 2020. Private equity firms with a Small LP Universe as insurers, pension funds and endowments, long-term perspective might therefore see the Officially announced in 2010 as the Qianhai are also limited in Hong Kong. Most financial merits of establishing strategic partnerships. At Shenzhen-Hong Kong Modern Service Industry institutions are subsidiaries of overseas entities 15 square kilometers, Qianhai is 12 times the size Cooperation Zone, the region will foster the and fund managers are skeptical of how much of Hong Kong’s central district, so local treatment development of financial services, logistics and renminbi they could raise from local institutions. for investments within this zone, if not the whole information technology by attracting Hong Kong “It really depends on how the policy is to be country, could count for a lot. companies. In addition to raising renminbi capital implemented. If the policy allows fund-of-funds “Much like the QFLP scheme, Qianhai in Hong Kong, those that set up shop in Qianhai to convert capital raised outside Hong Kong may mostly benefit a very small segment of can expect tax breaks and permission to issue into renminbi and then invest into local funds, it foreign GPs who have good relations with local local currency bonds. will open up a lot of opportunities,” says Brooke government and are the most prominent and The details have yet to be finalized, but a Zhou, executive director of LGT Capital Partners. sizeable among their peers,” says Ashurst’s Moroz. group of private equity players including The “If we are just allowed to raise offshore renminbi “These foreign players might have learnt a lesson Blackstone Group and KKR have reportedly held from local Hong Kong investors, it will be a much in Shanghai, but that doesn’t stop them from preliminary talks with government authorities. In smaller universe.” searching for new opportunities.”

Number 31 | Volume 25 | August 21 2012 | avcj.com 11 Private Equity 13-16 Nov Private Equity 13-16 Nov AVCJ & Venture Grand Hyatt AVCJ & Venture Grand Hyatt Forum 2012 Hong Kong Forum 2012 Hong Kong

4 weeks left to 4 weeks left to SAVE USD300 SAVE USD300 Book now Book now 25th Annual avcjforum.com 25th Annual avcjforum.com GLOBAL PERSPECTIVE, LOCAL OPPORTUNITY GLOBAL PERSPECTIVE, LOCAL OPPORTUNITY The Premier Gathering for Private Equity Investors in Asia 160+ private equity titans speaking, including:

Lead Sponsors Asia Series Sponsor stephen Pagliuca thomas H. lee Jonathan Nelson Charles r. Kaye Managing Director President Chief Executive Co-President bAiN CAPitAl lEE Equity Officer WArburg PiNCus PArtNErs ProVidENCE Equity PArtNErs

250+ institutional investors attending, including: Abu dhabi investment Authority MFC Foundation Alberta government Mitsubishi Corporation (China) Co-Sponsors Allstate investments, llC MlC aureos Annie E. Casey Foundation Nan Fung group capital Asia Alternatives New york life Capital Partners AtP Private Equity Partners ontario teachers’ Pension Plan Austsafe super oP trust Private Markets group Axiom Asia Private Capital ou Endowment Management Private Equity Partners Paul Capital Legal Sponsors Venture Capital Summit Knowledge Partner Legal Sponsor boHAi industrial investment Fund Management Co. ltd Ping An China Asset Management Company

SOLICITORS AND INTERNATIONAL LAWYERS Canada Pension Plan investment board PsP investments Capital dynamics robert Wood Johnson Foundation

PE Leaders’ Summit Sponsors CCb international Asset Management ltd stanford Management Company China resources Capital state of Wisconsin investment board Coller Capital stepstone group Committed Advisors teacher retirement system of texas Conrad N. Hilton Foundation teachers’ retirement system of the state of illinois LP Summit Sponsor Awards Sponsors Etera Mutual Pension insurance Company the California Endowment First swedish National the Endowment office Ford Foundation the guardian life insurance Company of America Exhibitors Investment Promotion Partner Future Fund the Johns Hopkins university gE Asset Management the Johnson Company Hamilton lane tokio Marine Asset Management Harald quandt Holding gmbH unigestion Official Broadcast Partner International Business Newspaper Philanthropy Partner Media Partners unquote HarbourVest Partners, llC united overseas bank limited i.b.M. retirement Fund uob group Supporting Organizations ilmarinen Mutual Pension insurance Company Virginia tech Foundation international Finance Corporation Williams College lgt Capital Partners And many more to come… RegistRation enquiRies: sponsoRship enquiRies: RegistRation enquiRies: sponsoRship enquiRies: For more information: For the latest program and Anil Nathani Darryl Mag Anil Nathani Darryl Mag confirmed speakers visit t: +852 3411 4938 t: +852 3411 4919 avcjforum.com t: +852 3411 4938 t: +852 3411 4919 e: [email protected] e: [email protected] e: [email protected] e: [email protected] avcjforum.com Private Equity 13-16 Nov AVCJ & Venture Grand Hyatt Forum 2012 Hong Kong

4 weeks left to SAVE USD300 Book now 25th Annual avcjforum.com GLOBAL PERSPECTIVE, LOCAL OPPORTUNITY 160+ private equity titans speaking, including:

stephen Pagliuca thomas H. lee Jonathan Nelson Charles r. Kaye Managing Director President Chief Executive Co-President bAiN CAPitAl lEE Equity Officer WArburg PiNCus PArtNErs ProVidENCE Equity PArtNErs

250+ institutional investors attending, including: Abu dhabi investment Authority MFC Foundation Alberta government Mitsubishi Corporation (China) Allstate investments, llC MlC Annie E. Casey Foundation Nan Fung group Asia Alternatives New york life Capital Partners AtP Private Equity Partners ontario teachers’ Pension Plan Austsafe super oP trust Private Markets group Axiom Asia Private Capital ou Endowment Management blackrock Private Equity Partners Paul Capital boHAi industrial investment Fund Management Co. ltd Ping An China Asset Management Company Canada Pension Plan investment board PsP investments Capital dynamics robert Wood Johnson Foundation CCb international Asset Management ltd stanford Management Company China resources Capital state of Wisconsin investment board Coller Capital stepstone group Committed Advisors teacher retirement system of texas Conrad N. Hilton Foundation teachers’ retirement system of the state of illinois Etera Mutual Pension insurance Company the California Endowment First swedish National Pension Fund the Endowment office Ford Foundation the guardian life insurance Company of America Future Fund the Johns Hopkins university gE Asset Management the Johnson Company Hamilton lane tokio Marine Asset Management Harald quandt Holding gmbH unigestion HarbourVest Partners, llC united overseas bank limited i.b.M. retirement Fund uob group ilmarinen Mutual Pension insurance Company Virginia tech Foundation international Finance Corporation Williams College lgt Capital Partners And many more to come… RegistRation enquiRies: sponsoRship enquiRies: For the latest program and Anil Nathani Darryl Mag confirmed speakers visit t: +852 3411 4938 t: +852 3411 4919 e: [email protected] e: [email protected] avcjforum.com Focus [email protected] Korea makes a splash With four deals of $350m or more in the last few weeks, South Korea has made its mark on Asia’s private equity investment league table. Why is it happening and can it continue?

In the space of two months, South to private equity than recent history of the fallout before the global financial crisis. Kumho ended Korea has seen four of the 12 largest private from Lone Star’s investment in Korea Exchange up in a debt restructuring program and its assets equity deals executed in Asia so far this year. Bank suggest. But there is uncertainty as to are still being offloaded. The company said last Last week, MBK Partners agreed to pay whether the chaebol deals will be forthcoming. year that it would divest assets worth KRW1 KRW1.1 trillion ($1.1 billion) for a 31% stake in “The deals that have been announced have trillion to about 10 PE funds. Woongjin Coway This is just shy of the KRW1.2 been in the market for some time, so I don’t think Woongjin Coway is a more recent trillion Affinity Equity Partners, Government of it signals a step change,” says Bob Partridge, a phenomenon. Parent company Woongjin Singapore Investment Corp. (GIC), Baring Private transaction advisory services partner with Ernst & Holdings has ramped up its exposure to solar Equity Asia and IMM Private Equity paid for Young. “The chaebol scenario is something we’ve energy and construction in recent years and 24% of Kyobo Life earlier in the month. Ontario heard every year for the past decade.” requires capital to service these businesses. Teachers’ Pension Plan (OTPP) snapped a 10% There are three possible explanations for Woongjin initially agreed to fold the asset into a stake in the same company for KRW470 billion this difference of opinion: the pipeline of recent joint venture with KTB Private Equity but this fell in June, while IBK Capital and Kstone Partners transactions is certainly mixed; the top-tier apart late in the process and MBK moved in. concluded a KRW415.5 billion investment in chaebols are in rude health, which might Hi-Mart, an electronics retailer acquired Daewoo Engineering & Construction. influence perceptions of these companies as a by Lotte Shopping for KRW1.25 trillion in July despite competition from MBK, is cited as another example of the credit squeeze as Private equity investment in South Korea majority-owner Eugene Corp. was under pressure 8,000 150 from lenders to deleverage. It’s worth noting that Hi-Mart is the only 6,000 transaction that involved a transfer of control and 120 the only one to go to a strategic investor. “What’s 4,000 interesting about these recent transactions is that Deals most are for minority stakes and geared towards

US$ million 90 2,000 IPOs,” says Scott Hahn, president of Hahn & Co. “You are seeing a concentration of larger-size 0 60 transactions that are geared to private equity 2006 2007 2008 2009 2010 2011 2012 YTD investors because control isn’t involved.” No. of deals US$ million Source: AVCJ Research Money matters The other factor contributing to the strong deal flow in Korea is the availability of financing at Does this signal an opening of the floodgates whole; and there have been no major blowups a time when the leading leveraged markets in as Korea’s conglomerates, or chaebols, offload among the second-tier chaebols in the style of the region – Australia and Japan – have become assets to willing private equity buyers? Kumho Industrial, so they aren’t necessarily under quieter. MBK has reportedly secured financing “It’s consistent with what I’ve been saying for extreme pressure to divest. from Hana Financial Group and Shinhan Financial the last year-and-a-half,” Jason Shin, managing The Kyobo Life deals were widely anticipated Group for the Coway deal, reflecting a wider partner at Vogo Investment. “The buyout as both sellers always wanted to exit. OTPP trend of domestic lender dominance. environment in Korea has improved greatly bought its stake from Korea Asset Management “Korea is even more extreme than Japan – the compared to five years ago. Although Korea Corp. (KAMCO), the agency assigned to manage cost of funding from local financial institutions wasn’t as affected by the global financial crisis parent company Daewoo when it slid into versus global ones is incomparable,” says Hahn. as elsewhere, banks started to become more bankruptcy in 1999. The 24% interest in Kyobo The country’s banks were far less exposed disciplined on credit risk and this has hit the tier- held by the Affinity group came from steelmaker to the global financial crisis than their Western two and tier-three chaebols.” Posco, which obtained it as part of the purchase counterparts and they don’t have to worry about of Daewoo International from KAMCO in 2010. foreign exchange volatility if they are lending in Trend or no trend? In the other transactions, though, there is local currency. At the same time, the amount of The recent transactions have helped send private evidence of sales driven by creditors applying the leverage on offer is said to be relatively low by equity transaction value past $4.5 billion, a three- squeeze to conglomerates. Daewoo Engineering global standards. “When the banks see one of the year high and it’s still only August. Not everyone & Construction was the source of many of Kumho larger PE firms making a 100% acquisition of a is prepared to endorse a trend, however. It is Industrial’s problems, having been acquired in business with solid cash flow and only 40% in the generally agreed that the country is more open a highly leveraged KRW6.4 trillion deal shortly transaction, it’s a no-brainer,” says Vogo’s Shin.

14 avcj.com | August 21 2012 | Volume 25 | Number 31 Private Equity Data file | AVCJ research [email protected]

Selected investments from May 2012 to July 2012

Jupiter Shop Channel Co. Bain Capital Asia, LLC $1,267mln Country Japan Deal Brief Sector Telecommunications Bain Capital has agreed to buy 50% stake in Jupiter Shop Channel, a Japanese television shopping company, from Sumitomo Founded 1996 Corp. The total consideration is an approximately Yen100 billion. Upon the transaction, Sumitomo and Bain will increase Management Atsushi Shinohara, President & CEO Jupiter’s value through the expansion of its customer base, improvement of cost competitiveness and promotion into other Asian countries.

HCP Holding Inc.(HCP Packaging) TPG Capital, L.P. $500mln Country China (PRC) Deal Brief Sector Manufacturing - Light Global private equity fund manager TPG Capital has acquired the entire interest in HCP Holding, also as known as HCP Founded 1960 Packaging, a Chinese cosmetic packagings manufacturer for around $500 million. The deal is backed by a$250 million five- Management Jeff Chen, President, CEO year loan facility.

Ivanhoe Mines Ltd. Temasek Holdings (Private) Limited $425mln Country Mongolia Deal Brief Sector Mining and metals Temasek Holdings has paid $425 million for a 5.5% stake, an approximately 40.86 million shares, in Mongolia-focused Founded 1994 Canadian miner Ivanhoe Mines. Ivanhoe Mines is an international mining company focused on expanding production Management Robert Friedland, CEO and the continuing development of its assets in Asia and Australia. It owns 66% interest in the Oyu Tolgoi Project, one of the world’s largest copper-gold-silver mines on track to begin initial production in southern Mongolia in 2012.

Daewoo Engineering & Construction IBK Capital Corp. $354mln Co., Ltd. Country South Korea Deal Brief Sector Construction IBK Capital and Kstone Partners, through their KoFc IBKs Kstone Private Equity Fund, have agreed to acquire 12.3% stake Founded 1973 in Daewoo Engineering & Construction, a South Korea-based engineering constructor, for Won415.5 billion, from Kumho Management Jong-Uk Seo, President Industrial. Concurrently, Kumho Industrial has also agreed to sell stakes in Seoul Express Bus Terminal and Kumho Buslines & CEO to boost liquidity.

Selected pe-backed IPOS from May 2012 to July 2012

IHH Healthcare Berhad Khazanah Nasional Bhd. $2,020mln Country Malaysia Sector Medical Other VC Sharholders(s): Abraaj Capital Asia IPO Date 7/25/2012 Issuer Profile Stock Bursa Malaysia - IHH Heathcare operates an integrated healthcare business and related services and has leading market positions in its home Exchange Mainboard markets of Singapore, Malaysia and Turkey. Besides, it has several healthcare operations and investments in China (excluding Macau and Taiwan) India, Hong Kong, Vietnam, Macedonia and Brunei. The Company’s integrated healthcare network provides the full spectrum of healthcare services, from primary healthcare clinics, to secondary and tertiary hospitals, to quaternary care and post-operative rehabilitation centres, complemented by a wide range of ancillary services including diagnostic laboratories, imaging centres, ambulatory care, medical education facilities, hospital project management and other related services.

Bros Eastern Co.,Ltd. CITIC Private Equity Funds Management Co., Ltd. $320mln Country China (PRC) Other VC Sharholders(s): Goldstone Investment Co., Ltd. Sector Textiles and clothing IPO Date 06/12/2012 Issuer Profile Stock Shanghai Stock Exchange Bros Easten engages in fabricated textile development and manufacturing in China. It specializes in R&D, production and Exchange - A Share marketing of mŽlange yarn. Bros has number of cotton ginning factories in Xinjiang, with several spinning operations Management Weixin Yang, Chairman in Zhejiang, Shandong, Jiangsu and Hebei. BROS’s clients include international brands GAP, M&S, Burberry, etc, as well as domestic retailer Lining, Metersbonwe and Baleno.

PT Toba Bara Sejahtra Tbk Baring Private Equity Asia $43mln Country Indonesia Issuer Profile Sector Mining and metals PT Toba Bara Sejahtra, a wholly owned subsidiary of Toba Sejahtra group, holds four coal mining concessions in East IPO Date 07/06/2012 Kalimantan through various operating companies. It started in commence production with PT Indomining in 2007, Stock Indonesia Stock Exchange Exchange being followed by the ABN site in 2008. The coals are exported to various countries for power generation and cement Management Justarina Naiborhu, manufacturing in all industries. President Director

Number 31 | Volume 25 | August 21 2012 | avcj.com 15 Private Equity & Venture Forum Japan 2012 13-14 September 2012, Conrad Tokyo 13th Annual

GLOBAL PERSPECTIVE, LOCAL OPPORTUNITY avcjjapan.com Meet 80+ representatives from the following limited partners: Aeris Capital AG Japan Bank for International Cooperation Alternative Investment Capital Macquarie Funds Group Asahi Kasei Pension Fund MetLife Alico Life Insurance Axiom Asia Private Capital MFC Foundation Capital Dynamics Mitsubishi Corporation Cogent Partners Mitsubishi UFJ Trust and Banking Corporation Coller Capital Mitsui Sumitomo Insurance Commonwealth Superannuation National Bank for Agricultural and Rural Corporation (CSC) Development (NABARD) Dai-ichi Life Insurance Company Ltd Nippon Life Insurance Company Fujitsu Pension Fund Nissay Asset Management Corporation GE Asset Management Global Investments Japan Government Pension Investment Fund (GPIF) Pantheon Ventures Hamilton Lane Pension Fund Association HarbourVest Partners Saplings Alternative Advisors Ltd Hermes GPE Sompo Japan Insurance Hyogo Prefectural Credit Federation of Squadron Capital Agricultural Cooperatives The Norinchukin Bank International Finance Corporation (IFC) Tokio Marine Asset Management Japan Alternative Investments Yasuda Enterprise Development Co Ltd ONLY 3 WEEKS LEFT. Register now at avcjjapan.com Visit avcjjapan.com for the full programme and speaker faculty. Contact us Registration: Anil Nathani T: +852 3411 4938 E: [email protected] Sponsorship: Darryl Mag T: +852 3411 4919 E: [email protected]

Lead Sponsor Asia Series Sponsor

Co-Sponsors

Legal Sponsor Knowledge Partner Exhibitor

avcjjapan.com