AVCJ Private Equity & Venture Forum 2011 AVCJ Private Equity & Venture Forum 2011 Japan Hong Kong 18 - 19 October 2011 7 - 10 November 2011 www.avcjjapan.com www.avcjforum.com ASIAN VENTURE CAPITAL JOURNAL Asia’s Private Equity News Source avcj.com July 26 2011 Volume 24 Number 27 Editor’s VieWpoint The Asian office: local, regional or both? PRIVATE EQUITY ASIA Page 3 neWs 3i, Actis, CalPERS, Carlyle, CHAMP PE, CICC, CITIC PE, IDG, Khazanah, KIC, LaSalle, Lone Star, Sequoia, Warburg Pincus M&A ASIA Page 4 focus Retirement homes have emerged as a private equity hot spot in Japan Page 12 Deal of the Week Hony Capital makes Industry outsiders Japan debut through Tokai Kanko investment What can female GPs do to shatter private equity’s glass ceiling? Page 7 Page 13 Deal of the Week analysis Indian power play Third-party flaws Blackstone closes in on Visa Group deal Page 13 PRC investment structures spark concerns Page 14 AVCJ Private Equity & Venture Forum GLOBAL PERSPECTIVE, LOCAL OPPORTUNITY 24 TH ANNUAL avcjforum.com Hong Kong 2011 7-10 November . Grand Hyatt Hong Kong The premier gathering for Private Equity investors in Asia Visit avcjforum.com for the latest programme and confirmed speakers KEyNoTEs John Connaughton David Rubenstein Christopher Flowers henry Kravis Managing Director Co-Founder & Chairman & Co-Founder, BAIN CAPITAL Managing Director Chief executive officer Co-Chairman & Co-Ceo THE CARLYLE GROUP j.C. fLOwERS & CO. LLC KOHLBERG KRAVIS ROBERTS & CO. howard Marks Jonathan M nelson David bonderman Chairman Ceo Founding partner OAKTREE PROVIdENCE EqUITY TPG CAPITAL PARTNERS PLEASE CONTACT OUR RegistRation enquiRies: Anil Nathani sponsoRship enquiRies: Darryl Mag PROjECT TEAm fOR: t: + 852 3411 4938 e: [email protected] t: +852 3411 4919 e: [email protected] LeaD sponsoRs asia seRies sponsoR Co-sponsoRs RGB LegaL sponsoRs pe LeaDeRs’ suMMit sponsoRs awaRDs sponsoR exhibitoRs investMent pRoMotion paRtneR inteRnationaL business newspapeR phiLanthRopy paRtneR MeDia paRtneR suppoRting oRganisations Editor’s VieWpoint [email protected] ASIAN VENTURE CAPITAL JOURNAL Managing Editor Tim Burroughs (852) 3411 4909 Senior Editor PRIVATE EQUITY ASIA Brian McLeod (1) 604 215 1416 The Asian office: Associate Editors Maya Ando (852) 3411 4908 Anita Davis (852) 3411 4808 Creative Director M&A ASIA Dicky Tang Regional, local or both? Designers Catherine Chau, Edith Leung, Mansfield Hor, ManYee Mak, Tony Chow Research Manager I’ve saId befOre tHat It’s higH tIme one office, although professionals can expect to Helen Lee GPs based in US and Europe resume plans to set spend plenty of time living out of hotel rooms as Research Associates Alfred Lam, Tweety Lau, up offices in Asia. Before these ambitions were they conduct due diligence. Perhaps this is now Venus Yeung, Kaho Mak mothballed during the global financial crisis, I changing as we see some fund-of-funds – notably Circulation Manager was often asked where in the region it is best to HarbourVest in Japan and Partners Group in South Sally Yip locate an office. The same question was posed Korea – branch out into countries where they Circulation Administrator to me at a recent event by an American fund feel the competitive landscape requires closer Prudence Lau manager. relations with GPs. Senior Manager, Delegate Sales But it seems that most GPs have become As the Asian private equity industry continues Anil Nathani sufficiently familiar with Asia to realize that there to evolve, the question of where to establish Marketing Manager isn’t much of a debate – it falls down to logistics a regional headquarters is blurring. A number Annie Ng and focus. of exceptional firms like Navis Capital and MBK Director, Business Development In the past, the choice for the one Asian office Partners – run out of Kuala Lumpur and Seoul, Darryl Mag is usually between Hong Kong and Singapore. respectively – have shown that regional private Sales Coordinator Those that opted for Hong Kong did so because equity can be successfully conducted from Debbie Koo of, amongst other advantages, its proximity to elsewhere in Asia. Conference Managers the major markets of Greater China and North That said, both Navis and MBK are also prime Matthew Swainson, Jonathon Cohen Asia. The Singapore faction tended to be either examples of the hub-and-spoke model: They Conference Administrator Amelie Poon primarily interested in the Southeast Asian and cultivate local networks out of offices in other Conference Coordinator Indian markets or keen to have easy access to parts of Asia while senior partners lead the fund Fiona Keung, Jovial Chung many of the region’s most established LPs such as with a regional perspective. Publisher & General Manager GIC and Temasek. Allen Lee The Hong Kong vs. Singapore question is Managing Director probably only relevant for the larger buyout Jonathon Whiteley firms that get a large part of their deal flow from Vice President, Administration Harmony Heung sell-side bankers as neither city – despite their Chairman Emeritus popular IPO markets – have shown little activity Allen Lee Dan Schwartz in terms of investments. For venture firms and Publisher those focused on minority stakes, it is difficult to Asian Venture Capital Journal compete with country-specific firms with an on- incisive Media the-ground presence and local networks. 20th Floor, Now we see that even the larger firms are Tower 2, Admiralty Centre 18 Harcourt Road, setting up offices in countries with strong activity Admiralty, Hong Kong T. (852) 3411-4900 such as Australia, India, China, Japan and, most F. (852) 3411-4999 recently, Indonesia. E. [email protected] URL. avcj.com For LPs, in particular fund-of-funds, the realities have traditionally been somewhat different. Most Beijing representative office Room 1805, Building 10, of these players are visited by funds seeking to Jianwai SOHO, 39 East 3rd-Ring Road, raise capital so there is no real need for more than Chaoyang District, Beijing 100 022, China T. (86) 10-5869-6205 F. (86) 10-5869-7461 Private equity rms in Hong Kong and Singapore E. [email protected] The Publisher reserves all rights herein. Reproduction in whole or in part is permitted only with the written consent of Hong Kong 356 AVCJ Group Limited. ISSN 1817-1648 Copyright © 2010 Singapore 205 Source: AVCJ Research * Until July 26, 2011 Number 27 | Volume 24 | July 26 2011 | avcj.com 3 neWs CalPers, Calstrs announce partner in Beijing. He joins the firm after 10 AustrAlAsiA years at Credit Suisse, where he was most gains in excess of 20% recently managing director and vice-chairman CHAMP looks to sell US pension fund CalPERS announced a 20.7% of investment banking in Greater China. Su is return for the year ending June 30, a 14-year charged with sourcing and executing private Australian fuel transporter high, while sister fund CalSTRS reported its best equity investments, banking on his past CHAMP Private Equity is looking to sell portfolio performance in 25 years with growth of 23.1%. experience dealmaking in the areas of energy, firm International Energy Services (IES) for The results suggest that the pension funds have consumer, healthcare, real estate, technology and A$375 million ($405 million), and has attracted rebounded from the lows of the global financial industrials. interest from Australian and Asian logistics firms, crisis, but both remain underfunded due to poor Reuters reported. IES is said to be the largest performance in the past decade. China’s HnA Group tipped fuel transporter in Australia, with additional CalPERS’ assets have a market value of around operations in Singapore and the US.. $237.5 billion, up from $200.5 billion a year earlier. to win battle for Ge seaCo Gains from private equity came in at 25.3%. Chinese conglomerate HNA Group is likely to lasalle buys trinity Funds The value of CalSTRS’ portfolio increased by $29 outbid private equity firm Kelso for container billion to $154.3 billion over the course of the leasing business GE SeaCo, the Financial Times Management year, with private equity gaining 22.5%. reported. The company has been put up for sale LaSalle Investment Management has agreed to by General Electric (GE) and its joint venture acquire Trinity Funds Management (TFM) from partner and could fetch $2.5-3 billion, including Australian property groups Trinity Group and debt.. Clarence Property Corp. for A$9.25 million ($9.9 million) plus the net assets of the business. Upon sequoia leads $10m completion of the deal, LaSalle will increase its assets in Australia to A$1.7 billion. investment in Mobotap Sequoia Capital led a $10 million Series A round of financing into US- and China-based mobile GreAter CHinA browser developer MoboTap, marking the venture capital firm’s first investment in a mobile CiCC tipped to buy stake in browser. Matrix Partners also participated in the funding. MoboTap is the developer of Dolphin Chinese trust company RMB100 million in the fund, which would provide Browser, a product that enables Google Android China International Capital Corp. (CICC) is poised financing for acquisitions as well as resources and mobile users to create web pages through faster to buy a 35% stake in Zheshang Trust, stretching property companies. and simpler gestures than traditional handset its financial industry scope to include the browsers. country’s innovative yet opaque trust sector. The More China audit concerns company, which is part-owned by TPG Capital and KKR, will likely launch the new venture later for Carlyle indiA this week, the Financial Times reported. Auditing procedures and financial controls have been called into question at China Energy Warbug Pincus begins China launches first car- Recycling and Concord Medical Services, both of which are in The Carlyle Group’s China portfolio. Kotak Mahindra divestment focused Pe fund This comes after fraud investigations at China Warburg Pincus has begun to divest its 9%-plus China’s first auto sector-focused private Forestry and China Agritech, which have also stake in Kotak Mahindra Bank, selling a nearly equity fund is looking to raise RMB30 billion received investment from the private equity firm.