Asia Private Equity A Monthly Report on Direct Equity Investment in Asia REVIEW Institutional Investors – Analysis

The Breakthrough Formation of BEV brings attention to individual investors, accentuating their presence in long-term unlisted assets

SWA20161223_Article01 Disseminated on 23rd December

he private equity asset class has long shunned retail or Key Points Tindividual investors due to long- ●●Launch of the US$1 bn Breakthrough Energy Ventures highlights the growing term illiquidity and the private veil that profile of individual investors shields transparency of transactions. The recent launch of the Breakthrough ●●Individual investors have been actively participating in Asia deals, with surging Energy Ventures (‘BEV’), however, has numbers in recent years – proven that such a perception no longer ◦◦ 2011 – 2013: 64 deals needs to hold true. ◦◦ 2014 – 2016: 207 deals Profile of BEC’s Members Name Position Current Organisation Industry Location Background Mr Mukesh Ambani Chairman & Managing Director Reliance Industries Ltd Conglomerate India Industrialist Mr John Arnold Co-chair Laura and John Arnold Foundation Finance – Impact Investing USA HNI Mr Marc Benioff Founder, Chairman & CEO Salesforce.com Technology – E-commerce USA Entrepreneur Mr Founder & CEO Amazon Technology – E-commerce USA Entrepreneur HRH Prince Alwaleed bin Talal Chairman Alwaleed Philanthropies Individual Investor Saudi Arabia HNI Mr Founder Bloomberg LP Media USA Entrepreneur Mr Richard Branson Founder Virgin Group Travel UK Entrepreneur Mr Ray Dalio Founder Bridgewater Associates Finance – Fund Mgt USA Financier Mr Aliko Dangote Founder & Chief Executive Dangote Group Conglomerate Africa Entrepreneur Mr John Doerr Chairman Kleiner Perkins Caufield & Byers Finance – VC Fund Mgt USA Financier Mr Co-chair Bill & Melinda Gates Foundation Technology USA Entrepreneur Mr Reid Hoffman Co-founder LinkedIn Technology – Social Media USA Entrepreneur Mr Chris Hohn Founder The Children's Investment Fund Finance – Hedge Fund Mgt UK Financier Mr Vinod Khosla Founder Khosla Ventures Finance – VC Fund Mgt USA Financier Mr Jack Ma Executive Chairman Alibaba Group Holding Ltd Technology – E-commerce China Entrepreneur Mr Dustin Moskovitz Co-founder Good Ventures Technology – Social Media USA Entrepreneur Ms Cari Tuna Co-founder Good Ventures Finance – Impact Investing USA HNI Mr Patrice Motsepe Founder & Executive Chairman African Rainbow Minerals (ARM) Mining Africa Entrepreneur Mr Xavier Niel Founder Iliad Group Telecommunication France Entrepreneur Mr Hasso Plattner Co-founder SAP SE Technology – Software Germany Entrepreneur Mr Julian Robertson Founder & Chairman Tiger Management Finance – Hedge Fund Mgt USA Financier Mr Neil Shen(1) Founding Managing Partner Sequoia Capital China Travel China Entrepreneur Mr Nat Simons Co-founder Prelude Ventures Finance – Impact Investing USA Financier Ms Laura Baxter-Simons Co-founder Prelude Ventures Finance – Impact Investing USA Financier Mr Masayoshi Son Founder, Chairman & CEO SoftBank Group Corp Technology – Investment Japan Entrepreneur Mr George Soros Chairman Soros Fund Management LLC Finance – Hedge Fund Mgt USA Financier Businessman, Mr Tom Steyer NextGen Climate Finance – Impact Investing USA Financier Philanthropist & President Mr Ratan Tata Chairman Emeritus Tata Sons Conglomerate India Industrialist Ms CEO Hewlett Packard Enterprise Technology – E-commerce USA Entrepreneur Ms Zhang Xin Co-founder and CEO SOHO China Real Estate China Entrepreneur Mr Pan Shiyi Chairman SOHO China Real Estate China Entrepreneur Mr Founder, Chairman & CEO Facebook Technology – Social Media USA Entrepreneur Dr. Priscilla Chan Medical practitioner Chan Zuckerberg Initiative Finance – Impact Investing USA HNI University of California University Endowment USA Education

(1) classification of background of each of the member is based on the origin of his/her achievement. e.g. while Mr Neil Shen is the founding managing partner of Sequoia Capital China, he is a founder of Ctrip.com International Ltd, which was among his earlier successes prior to forming Sequoia Capital China BEC = Breakthrough Energy Coalition HNI = High Networth Individial

Fig. 1 Profile of BEC’s Members Name Position Current Organisation Industry Location Background by Industry

Mr Mukesh Ambani Chairman & Managing Director Reliance Industries Ltd Conglomerate India Industrialist Mining University 2.9% Endowment Individual Investor 2.9% Mr John Arnold Co-chair Laura and John Arnold Foundation Finance – Impact Investing USA HNI 2.9% Mr Marc Benioff Founder, Chairman & CEO Salesforce.com Technology – E-commerce USA Entrepreneur Travel 5.9% Mr Jeff Bezos Founder & CEO Amazon Technology – E-commerce USA Entrepreneur Real Estate HRH Prince Alwaleed bin Talal Chairman Alwaleed Philanthropies Individual Investor Saudi Arabia HNI 5.9% No. of Mr Michael Bloomberg Founder Bloomberg LP Media USA Entrepreneur Finance Conglomerate Members 35.3% Mr Richard Branson Founder Virgin Group Travel UK Entrepreneur 8.8% Surveyed: 34 The finance and TMT sectors have proven to Mr Ray Dalio Founder Bridgewater Associates Finance – Fund Mgt USA Financier be the breeding ground of achievers. Together, Mr Aliko Dangote Founder & Chief Executive Dangote Group Conglomerate Africa Entrepreneur TMT they account for 70.6% of the 34-member 35.3% strong BEC Mr John Doerr Chairman Kleiner Perkins Caufield & Byers Finance – VC Fund Mgt USA Financier Mr Bill Gates Co-chair Bill & Melinda Gates Foundation Technology USA Entrepreneur Mr Reid Hoffman Co-founder LinkedIn Technology – Social Media USA Entrepreneur by Location

Mr Chris Hohn Founder The Children's Investment Fund Finance – Hedge Fund Mgt UK Financier Saudi Arabia 2.9% Mr Vinod Khosla Founder Khosla Ventures Finance – VC Fund Mgt USA Financier Germany 2.9% Mr Jack Ma Executive Chairman Alibaba Group Holding Ltd Technology – E-commerce China Entrepreneur France Africa Europe 5.9% 11.8% 2.9% Mr Dustin Moskovitz Co-founder Good Ventures Technology – Social Media USA Entrepreneur UK Ms Cari Tuna Co-founder Good Ventures Finance – Impact Investing USA HNI 5.9% Japan No. of Mr Patrice Motsepe Founder & Executive Chairman African Rainbow Minerals (ARM) Mining Africa Entrepreneur 2.9% Members USA India 58.8% 5.9% Surveyed: Mr Xavier Niel Founder Iliad Group Telecommunication France Entrepreneur Asia 34 20.6% China Mr Hasso Plattner Co-founder SAP SE Technology – Software Germany Entrepreneur 11.8% China has the largest number represented in Mr Julian Robertson Founder & Chairman Tiger Management Finance – Hedge Fund Mgt USA Financier the BEC, after the USA, that underscores the importance of including influential business Mr Neil Shen(1) Founding Managing Partner Sequoia Capital China Travel China Entrepreneur leaders from China in BEC’s initiatives Mr Nat Simons Co-founder Prelude Ventures Finance – Impact Investing USA Financier Ms Laura Baxter-Simons Co-founder Prelude Ventures Finance – Impact Investing USA Financier Mr Masayoshi Son Founder, Chairman & CEO SoftBank Group Corp Technology – Investment Japan Entrepreneur by Background Education Mr George Soros Chairman Soros Fund Management LLC Finance – Hedge Fund Mgt USA Financier 2.9% Industrialist Businessman, Mr Tom Steyer NextGen Climate Finance – Impact Investing USA Financier 5.9% Philanthropist & President Mr Ratan Tata Chairman Emeritus Tata Sons Conglomerate India Industrialist Entrepreneur More than half of BEC’s members are HNI 52.9% 11.8% entrepreneurs, that underlines the leadership of Ms Meg Whitman CEO Hewlett Packard Enterprise Technology – E-commerce USA Entrepreneur this group of business leaders is crucial to the No. of future roadmap of the world economy Ms Zhang Xin Co-founder and CEO SOHO China Real Estate China Entrepreneur Members Surveyed: Mr Pan Shiyi Chairman SOHO China Real Estate China Entrepreneur 34 Financier Mr Mark Zuckerberg Founder, Chairman & CEO Facebook Technology – Social Media USA Entrepreneur 26.5% Dr. Priscilla Chan Medical practitioner Chan Zuckerberg Initiative Finance – Impact Investing USA HNI University of California University Endowment USA Education

(1) classification of background of each of the member is based on the origin of his/her achievement. e.g. while Mr Neil Shen is the founding managing partner of Sequoia Capital China, he is a founder of N.B.: the percentage may not add up to 100% due to the rounding of numbers Ctrip.com International Ltd, which was among his earlier successes prior to forming Sequoia Capital China HNI = High Networth Individial TMT = Technology, Media & Telecommunication BEC = Breakthrough Energy Coalition HNI = High Networth Individial

Compiled by: Asia Private Equity Review BEV is a US$1 billion fund that is an “investor-led fund”. BEC stressed escalated from 51 to 73 at the close is designed to invest in early stage this point in a public statement that of 2016. In particular, the number of innovations and to help build new noted that the ultimate success of this investors from both China and India companies that will deliver emissions- fund will be measured by “risk-adjusted have been on a steady rise (Fig. 2 & free energy, agriculture and goods returns” (Fig. 1). Fig. 3). to the world. It is the brainchild The launch of BEV spotlights the The private equity paradigm of members of the Breakthrough growing list of individual investors which has long been guided by the Energy Coalition (‘BEC’). participating in Asia’s private equity/ ethos of institutional investors is now BEC was unveiled to a global venture capital arena. In the three years beginning to be reshaped by individual audience at the 2015 United Nations from 2011 to 2013, individual investors investors who have won the trophies Climate Change Conference. It is a are known to have participated in no of recognised achievements. It is a 34-member strong alliance with the more than 65 deals in this period. But watershed development for this asset mission to transform the world’s since 2014, the yearly number had class. n energy supply for the next generation. All of its members are outstanding BEC’s Asian Members & Their PE/VC Initiatives individuals with envious credentials Current PE/VC Initiatives – Geographical Name and/or achievements. As an example, Organisation Selective Focus Mr Bill Gates, a founder of Microsoft Reliance Jio Digital India Inc, currently co-chairman of the Reliance Startup Fund, a 50 rupees bn Mr Mukesh India Bill & Melinda Gates Foundation, Ambani Industries Ltd (US$735.5 m) fund to boost is the chair of BEV. In addition to entrepreneurship in India being high net worth individuals, Yunfeng Capital China BEC’s members are influential in their Founding Partner respective industries, with China’s Alibaba Group Alibaba Enterprise Funds, Mr Jack Ma, a founder and executive Mr Jack Ma Holding Ltd 2 funds designed to incubate chairman of Alibaba Group Holding promising e-commerce Greater China Ltd, and Japan’s Mr Masayoshi Son, startups in Hong Kong and chairman and chief executive officer Taiwan of , enlisted as Sequoia Capital Sequoia Capital China SoftBank Group Corp Mr Neil Shen China members of this elite club. China Founding Managing Partner Within the context of private SoftBank Vision Fund, a SoftBank Group US$100 bn fund that seeks equity, BEV is more than just a fund Mr Masayoshi Global that seeks to transform the future of Son Corp innovative technology the energy supply of the world. It is companies worldwide an emphatic statement from a group Tata Capital, an alternative asset investment platform of individual achievers that in order to Mr Ratan Tata Tata Sons India succeed in reaching the desired goal, that provides VC, PE and debt funds a long-term investment horizon. It is Ms Zhang Xin a recognition of the axiom of private SOHO China N/A N/A equity. Added to this, investors’ active Mr Pan Shiyi involvement is also crucial. BEV is the template. It has a 20-year lifespan and Fig. 2 Compiled by: Asia Private Equity Review Profile of Individual Investors’ Deal Pace in Asia (2011 – 2016(1))

by Amount by Number of Deals

Individual investors have been pragmatic The percentage of individual investors taking and participated in a wide range in deal sizes. a stake in unlisted companies along with PE/ In both 2013 and 2014, they participated in VC investors has been on the rise substantially larger deal volumes

(US$ bn) (%) (No. of Deals) (%) 8 16 100 10

13.5% 80 8 6 12 6.3% 60 5.6% 6 4 8.5% 8 6.7 40 3.8% 83 4 5.9 73 3.3% 2 4 51 3.4% 20 2.1% 2 2.5% 2.3% 3.1 1.9% 33 1.1% 19 1.3 0.8 1.5 12 0 0 0 0 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016

N.B.: % represents individual investor-participated deals as a % of total private N.B.: % represents individual investor-participated deals as a % of total private equity deals in Asia in respective year equity deals in Asia in respective year

by Location Individual Investors Active in Asia VC/PE Deals – Selective Amount Number of Deals 0.3% Japan 5.2% Investor Location Associated Company 1.3% Taiwan 1.9% 2.1% 7.6% Mr Rajan Anandan India Google India 2.1% Southeast Asia 19.9% 2.3% Australia/ Mr Kunal Bahl India Snapdeal (Jasper Infotech Pvt Ltd) New Zealand 8.1% South Korea 2.2% Mr Rohit Bansal India Snapdeal (Jasper Infotech Pvt Ltd) Mr Sachin Bhatia India MakeMyTrip Ltd, TrulyMadly India 32.1% 84.3% Mr Shogo Kawada Japan DeNA Co Ltd Mr Phanindra Sama India redBus (Pilani Soft Labs Pvt Ltd) Mr Kunal Shah India Freecharge (Accelyst Solutions Pvt Ltd) China 30.6% Mr Sandeep Tandon India Freecharge (Accelyst Solutions Pvt Ltd) Total: US$19.4 bn Total: 271 Mr Ratan Tata India Tata Group N.B.: the US$19.4 bn represents the transaction volume in total Mr Wang Gang China Alibaba Group Holding Ltd for the period from 2011 to 2016

(1) Up to 7th December 2016

Fig. 3 Compiled by: Asia Private Equity Review

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