Asia’s Private Equity News Source avcj.com October 08 2013 Volume 26 Number 38 EDITor’s VieWPOINT Nominations open for the AVCJ India Awards Page 3 NEWS Apollo, China Media Capital, CDC, DRC, General Atlantic, GGV, GSR, ICG, Ignitioin, Integral, Macquarie, Matrix, Mavcap, Northstar, OPTrust, Qiming, SAIF, Temasek Page 4 DEAL OF THE WEEK J-Star completes buyout of serial private equity play Primagest Page 14 INDUSTRY Q&A The Abraaj Group’s Aman From brick to click Lakhaney discusses emerging markets China’s traditional retailers respond to the e-commerce challenge Page 7 Page 15 FOCUS DEAL OF THE WEEK Taking in the sights Clean bill of health VCs identify niches in Asia online travel Page 11 KKR announces buyout of Panasonic unit Page 14 INDIVIDUALLY, THEY OUTPERFORM. TOGETHER, THEY’RE OFF THE CHARTS. ASIA EDGE Live from Hong Kong. Weekdays 11am SIN/HK ©2013 Bloomberg L.P. All rights reserved. 54914729 0813 EDITor’s VieWPOINT [email protected] Managing Editor Tim Burroughs (852) 3411 4909 Staff Writers Andrew Woodman (852) 3411 4852 Mirzaan Jamwal (852) 3411 4821 Will buyouts boss Winnie Liu (852) 3411 4907 Creative Director Dicky Tang Designers Catherine Chau, Edith Leung, Mansfield Hor, Tony Chow the 2013 India Senior Research Manager Helen Lee Research Manager Alfred Lam Research Associates Herbert Yum, Isas Chu, Awards? Jason Chong, Kaho Mak Circulation Manager Sally Yip Circulation Administrator Prudence Lau Manager, Delegate Sales INDIA BUYOUTS HAVE CROSSED THE also come into the reckoning for Private Equity Pauline Chen $1 billion threshold in only two years since Deal of the Year. Director, Business Development private equity first came to the country. Those Today we invite AVCJ readers to have their say. Darryl Mag years were, unsurprisingly, 2006 and 2007, the Nominations for the 4th annual India Awards are Manager, Business Development peak of the pre-global financial crisis boom, now open and will remain so until October 31. Anil Nathani, Samuel Lau when total PE investment reached $7.7 billion Submissions should relate to India investment, Sales Coordinator and then the all-time high of $17.9 billion. exit and fundraising activity between November Debbie Koo Nine months into 2013 and buyout deal flow 1, 2012 and October 31, 2013. The categories are Conference Managers is once again within touching distance of the listed below. Jonathon Cohen, Sarah Doyle, Zachary Reff $1 billion mark. India has seen 15 transactions For more details of the process, rules and Conference Administrator and the grand total is $954.7 million. Indeed, qualification criteria, or to make a nomination, Amelie Poon Conference Coordinator depending on how one classifies KKR’s $470 please go to www.avcjforum.com/awards. Fiona Keung, Jovial Chung million acquisition of Alliance Tire Group – the Alternatively, nominations can be submitted by INDIVIDUALLY, THEY Publishing Director company is international and was founded in email ([email protected]). Allen Lee Israel so AVCJ Research classifies it as coming The AVCJ Editorial Board will evaluate the Managing Director OUTPERFORM. from that jurisdiction, although others would entries and submit long lists to a select panel of Jonathon Whiteley beg to differ – this might already be India’s best industry judges. The judges will consider these buyout year on record. recommendations and final short lists will be TOGETHER, THEY’RE So far, the overall vintage has not proved drawn up in consultation with the AVCJ Editorial particularly stellar. Private equity firms have Board. deployed $6.2 billion (not including Alliance), The shortlists will be posted online for OFF THE CHARTS. lower than the full-year totals for each of the the entire private equity and venture capital Incisive Media Unit 1401 Devon House, Taikoo Place previous three years. It would take a busy final community to vote on from November 8 until 979 King’s Road, Quarry Bay, Hong Kong quarter to surpass the 2010 and 2011 figures, November 22. The AVCJ subscriber base has a T. (852) 3411-4900 although the $7.1 billion of 2012 is a realistic 50% say in the final result, with the judges and the F. (852) 3411-4999 ASIA EDGE E. [email protected] target. AVCJ Editorial Board each accounting for 25%. URL. avcj.com What this means is that the buyout The winners will be announced at a gala Live from Hong Kong. Beijing Representative Office concentration is unusually high – 15%, lower dinner in Mumbai on December 5, during the No.1-2-(2)-B-A554, 1st Building, Weekdays 11am SIN/HK No.66 Nanshatan, than the 19% of 2006 but well in excess of the AVCJ India Forum. Chaoyang District, Beijing, 6% posted in 2007 and anything since then. A People’s Republic of China T. (86) 10 5869 6203 few big deals make a lot of difference: Partners THE 2013 INDIA AWARDS CATEGORIES: F. (86) 10 5869 6205 Group’s $270 million acquisition of business • Firm of the Year E. [email protected] process outsourcing firm CSS Corp; Baring Private • Private Equity Professional of the Year Equity Asia’s (BPEA) $262 million investment in • Exit of the Year Hexaware, which could pass $400 million once • Private Equity Deal of the Year The Publisher reserves all rights herein. Reproduction in whole or in part is permitted only with the written consent of a mandatory tender offer kicks in, are the largest • Venture Capital Deal of the Year AVCJ Group Limited. buyouts in seven years. • Fundraising of the Year ISSN 1817-1648 Copyright © 2013 These transactions, alongside BPEA’s $260 million investment in Lafarge India – a growth deal but perhaps a sign of what is to come – will Tim Burroughs likely feature prominently in the 2013 AVCJ India Managing Editor ©2013 Bloomberg L.P. All rights reserved. 54914729 0813 Awards. A cluster of cleantech investments may Asian Venture Capital Journal Number 38 | Volume 26 | October 08 2013 | avcj.com 3 NEWS ASIA PACIFIC Investors see bifurcation in VC-backed Forgame raises real assets exposure $206m in HK IPO Asia PE fundraising Investor appetite for real assets in Asia is strong, Forgame Holdings, a Chinese mobile game but infrastructure and real estate players speaking developer backed by several VC firms, saw its recovers to $9.5b in 3Q at the AVCJ Real Assets forum in Singapore noted stocks jump 32.4% to HK$67.50 ($8.7) a share Asia-focused private equity funds raised $9.5 that the nature of demand differs to the extent on its first day trading following its $206 million billion in the third quarter of 2013, up from the that a classic PE-style fund is in some cases no Hong Kong IPO. The Guangzhou-headquartered multi-year low of $5.2 billion in the previous longer the most appropriate option. firm’s backers include TA Associates, Qiming quarter, according to provisional data from AVCJ Grant Kelley, co-head of Asia Pacific at Apollo Venture Partners and Ignition Capital Partners. Research. The number was boosted by KKR Global Management, drew a distinction between Asian Fund II, which announced a final close of real estate and infrastructure in this context: while China Media Capital backs $6 billion in July, contributing $3 billion to the quarterly total - adding to the $3 billion first close Charm take-private that came last year. Hong Kong-based China Media Capital is backing management buyout of Charm Communications, CDC hires UTI Capital’s a US-listed Chinese advertising agency. The bid values the company at about $180 million. Murugappan A consortium, led by Charm’s chairman and CDC, the UK development finance institution, founder He Dang, and China Media Capital, has has hired Alagappan Murugappan as managing offered to acquire all outstanding shares that it director with its Asia funds team. Murugappan doesn’t already own for $4.70 apiece. was previously CEO with private equity firm UTI Capital. He will manage the team responsible for Baidu, VC-backed Qunar the organization’s fund investments across South Asia, as well as its pre-existing investments in the former is time-sensitive and government- files for $125m IPO China and Southeast Asia. independent, the latter often appears immune Qunar, a Chinese travel website majority-owned to cycles but is highly influenced by government by internet search giant Baidu, is looking to raise ICG adds Nyree Hu to Asia policy. “There is a prevailing view that real estate up to $125 million through an IPO in the US. is all about location, but it’s not. It is about timing,” GSR Ventures and GGV Capital still hold minority team he said. “The mindset is of a trader is essential for positions in the company but it is unclear Intermediate Capital Group (ICG) has hired Nyree real estate success. Infrastructure is much more whether they plan to use the offering as an Hu as Asia director with its 11-strong global about long-term gains.” opportunity to exit. distribution team. Hu joins ICG from CQS where Vijay Pattabhiraman, managing director and she was director of marketing for Asia. Prior to CIO for global real assets - Asia infrastructure at Temasek commits $100m that Hu held a number of senior sales positions at J.P. Morgan Asset Management, also highlighted UBS Wealth Management and Ecofin, the utilities the role that land prices play in these differing in China 21Vianet specialist investment management firm. outlooks. He estimates that land accounts for less Temasek Holdings has invested $100 million in than 5% of the overall cost of power projects, 21Vianet Group, a US-listed Chinese internet which means volatility has little impact on data center services provider, for about a 10% AUSTRALASIA returns.