Asia’s Private Equity News Source avcj.com December 01 2015 Volume 28 Number 45 EDITOR’S VIEWPOINT Southeast Asia: A shallow PE fundraising market Page 3 NEWS Bain, Carlyle, Cathay, EMR, Hastings, Highlight, Mitsui, Northstar, NSSF, RRJ, Sequoia, SoftBank, TPG, Warburg Pincus Page 4 FOCUS Transparency, timing of entry are key to cracking venture secondaries Page 11 DEAL OF THE WEEK Partners Group to back Aiyingshi’s cross-border acquisition initiative Page 12 Top of the world? AVCJ RESEARCH China VC firms seek additional capital to reach into the growth stages Page 7 Data f ile Page 15 DEAL OF THE WEEK PROFILE Connected classes Cross-border angel IFC, Everstone support digital education Page 12 Huoy-Ming Yeh’s China-US VC adventure Page 14 Anything is possible if you work with the right partner Unlocking liquidity for private equity investors www.collercapital.com London, New York, Hong Kong EDITOR’S VIEWPOINT [email protected] Managing Editor Tim Burroughs (852) 3411 4909 Associate Editor Growing pains Winnie Liu (852) 3411 4907 Staff Writer Holden Mann (852) 3411 4964 NORTHSTAR GROUP HAS RAISED $810 these represents a perfect sub-regional blend: Creative Director million for its fourth fund, but getting there Navis on occasion touches Australia and Hong Dicky Tang was no easy task. The GP’s primary market is Kong, while Northstar is highly concentrated on Designers Indonesia, and while Joko Widodo was elected Indonesia. Catherine Chau, Edith Leung, president last year on the back of renewed Two explanations spring to mind for the Mansfield Hor, Tony Chow optimism, he needs time to implement the relative paucity of GPs in the upper middle Senior Research Manager economic reforms upon which he will be judged. market, and both relate to the fact that Southeast Helen Lee Meanwhile, LPs were preoccupied by Asia remains a collection of markets rather than Research Associates uncertainty over the rupiah and the economy. an integrated zone. Herbert Yum, Jason Chong, Kaho Mak The situation is far removed from 2011 when First, any GP hoping to offer diversified Northstar raised $820 million for its third fund: geographical coverage needs an office – and Senior Marketing Manager Indonesia was Asia’s third emerging market of staff who speak the relevant languages – in Sally Yip Circulation Administrator scale, a potential counterpoint to China and almost every market. This is a natural barrier to Prudence Lau India, and LPs were falling over themselves to get entry. Only a GP of reasonable size would have Subscription Sales Executive an allocation. the resources to build this presence and that is in Jade Chan Northstar Equity Partners IV exceeded its turn dependent on the fee streams that emanate Manager, Delegate Sales approximate target of $800 million and fell short from larger funds. Pauline Chen of the hard cap of $1 billion. But it is still the Second, successful cross-border strategies Director, Business Development fifth-largest private equity fund ever raised for within Southeast Asia are not that widespread Darryl Mag Southeast Asia (Indonesia is expected to account among private equity firms. Rather than address for about 70% of the corpus, as was the case for every ASEAN market, many GPs tend to pick two Manager, Business Development Anil Nathani, Samuel Lau Fund III, with the rest deployed in markets across or three that are somewhat complementary. the sub-region). Hence, Southern Capital’s focus on Indonesia, Sales Coordinator Debbie Koo There are more GPs operating in Southeast Singapore and Malaysia, or Creador’s Asia than five years ago, but it is still a relatively concentration on Malaysia and Indonesia (in Conference Managers small group. Overall fundraising has topped $5 addition to India). Indeed, the firm has added Jonathon Cohen, Sarah Doyle, Conference Administrator billion on one occasion – 2007, inevitably – and the Philippines to the remit for its latest fund, but Amelie Poon surpassed $4 billion five times. An even smaller coverage is still in the very early stages. Conference Coordinator number of GPs have managed to raise funds of The ASEAN Economic Community, set to Fiona Keung, Jovial Chung significant size. AVCJ Research has records of launch at the end of this year, is intended to Publishing Director three funds of $1 billion or more (all raised by deliver a level of integration that can underpin Allen Lee Navis Capital) and nine in the $500 million to $1 broader investment theses, but there is big billion range (three of them raised by Northstar). difference between announcing an initiative and This presents a challenge for LPs that want successfully implementing it. exposure to Southeast Asia outside of the pan- Hong Kong Headquarter Unit 1401 Devon House, Taikoo Place regional vehicles. Institutional investors that for 979 King’s Road, Quarry Bay, reasons of scale can’t write checks smaller than Tim Burroughs Hong Kong T. (852) 3411-4900 $80 million might struggle to consider anyone Managing Editor F. (852) 3411-4999 E. [email protected] apart from Navis and Northstar. And neither of Asian Venture Capital Journal URL. avcj.com Beijing Representative Office Fund size segments in SE Asia by capital raised No.1-2-(2)-B-A554, 1st Building, No.66 Nanshatan, Chaoyang District, Beijing, People’s Republic of China T. (86) 10 5869 6203 F. (86) 10 5869 6205 E. [email protected] 2004-2008 $500m and above Post-2008 vintage funds $100m-$500m vintage funds Below $100m The Publisher reserves all rights herein. Reproduction in whole or in part is permitted only with the written consent of AVCJ Group Limited. ISSN 1817-1648 Copyright © 2015 Source: AVCJ Research Number 45 | Volume 28 | December 01 2015 | avcj.com 3 NEWS GLOBAL PE consortium wins $7.5b Weibo leads $200m round TransGrid deal for video app maker Warburg Pincus closes A consortium featuring Hastings Fund Chinese social media platform Weibo Management, Caisse de dépôt et placement du Corporation has led a $200 million Series D round global fund at $12b Québec (CDPQ) and the Abu Dhabi Investment of funding for Yixia Technology, a Beijing-based Warburg Pincus has closed its latest global fund, Authority (ADIA) will pay A$10.26 billion ($7.5 mobile video app developer. Sequoia Capital and which will seek investments in companies at all billion) for the New South Wales government South Korea’s YG Entertainment also participated. stages of development, at the hard cap of $12 electricity transmission network. Hastings will The round values the company at more than $1 billion. It will focus on sectors such as energy, hold a 20.02% stake in TransGrid, with CDPQ billion. financial services, healthcare and consumer, taking 24.99% and ADIA 19.99%. The other industrial and business services, and technology, investors are the Kuwait Investment Authority HNA invests $500m in tour media and telecom. and locally-listed energy and infrastructure manager Spark Infrastructure with 19.99% and operator Tuniu 15.01%, respectively. China’s HNA Tourism Group has agreed to invest ASIA PACIFIC $500 million for a 24.1% stake in Tuniu, a US- listed Chinese online package tour provider. This AVCJ journalists win follows two rounds of funding worth a combined $648 million, with Hony Capital, DCM, Sequoia, awards Temasek Holdings, Ctrip and JD.com among the Asian Venture Capital Journal was honored at investors. the 2015 State Street Institutional Press Awards, Asia Pacific. Winnie Liu, associate editor at the Allianz, Baidu, Hillhouse publication, won the Journalist of the Year - Financial Literacy award, while Staff Writer form insurance JV Holden Mann won the Award for Best Newcomer Chinese search giant Baidu, German insurer and was highly commended in the alternatives Rival bids were reportedly submitted by State Allianz and China-based Hillhouse Capital category. Managing Editor Tim Burroughs Grid Corporation of China in conjunction with have formed an internet insurance company was highly commended in both the financial Macquarie, AustralianSuper, and IFM Investors to distribute insurance products in China. It literacy and alternatives categories and won the and Queensland government-owned QIC. will apply for a license to sell insurance online Journalist of the Year - Regulation award. TransGrid is the owner and operator of the throughout the country, targeting both main high voltage transmission network in New individual customers and small and medium- South Wales and the Australian Capital Territory, sized businesses. AUSTRALASIA connecting generating, distributors and major end users to the grid. This network comprises 99 CCCC, NSSF set up TPG, Carlyle complete bulk supply substations and more than 12,900 kilometers of transmission lines and cables. infrastructure fund Healthscope exit The proceeds of the 99-year lease on China Communications Construction (CCCC) TPG Capital and The Carlyle Group have TransGrid will be used to pay for schools, and the National Council for Social Security Fund completed their exit from Australian hospital hospitals, public transport and roads. The (NSSF) have established a RMB15 billion ($2.3 operator Healthscope, having privatized the government plans on leasing out 49% of the billion) infrastructure fund. The vehicle received company in 2010 and re-listed it last year. They state electricity network with a view to raising RMB9 billion state-owned CCCC RMB6 billion sold 308.2 million shares for a reported A$853.7 A$20 billion. The partial lease of Ausgrid is from NSSF. million ($612 million). The PE firms made previous expected to be completed by mid-2016. partial exits through the IPO and a block trade NXP sells power assets to worth A$473 million and around A$900 million, respectively. billion, is higher than an earlier offer submitted JAC Capital by iKang’s founder and CEO and FountainVest NXP Semiconductors, a Dutch chip manufacturer Partners.