Weekly digest - May 26 2021

26 May 2021

COVER STORY

CHINA UNIVERSITY START-UPS: CAMPUS CREATIVITY

From DJI to Ele.me, numerous start-ups have emerged from universities in Greater China. VC investors recognize the talent, but they are sometimes wary of the structures.

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TALKING POINTS

A WAVE OF SECONDARIES

Much is expected of Asia's secondaries market in 2021. One advisor suggests that volumes could reach $7-10 billion, or roughly 10% of the global total. Last year, Asia was responsible for $3.92 billion out of $61.7 billion globally across all alternatives, according to Setter Capital.

Recent announcements indicate some positive movement. Huagai Capital has spun out healthcare assets from three renminbi-denominated funds into a continuation vehicle backed by TR Capital and Shenzhen Capital Group; Legend Capital did the same from two US dollar funds, with support from Hamilton Lane and Coller Capital; and Buhuo Ventures completed a renminbi-to-US dollar restructuring of its debut fund.

These deals capture the prevalent themes: China, cross-currency restructurings, and continuation vehicles. Single asset continuation funds are also being pursued by GPs, as is the case globally. However, concerns are expressed about a demand-supply mismatch. This is especially true in Asia where relatively few groups will write large checks for single-asset deals, in part because of their own concentration limits. Broad syndication is possible but challenging.

At the same time, sizeable opportunities like the Hopu Investments-GLP transaction currently in process are limited in number. There are plenty of smaller deals, but most secondaries investors wouldn't look at anything below $50 million in NAV. Investors will remain selective. 

In Depth:
• Asia secondaries: Waiting for the flood - June 2020

• Alternative fund structures: Alternative universe - October 2020

PROFILE

ADAMANTEM CAPITAL'S ROB KOCZKAR

After swapping a career in private equity for a role in philanthropy, Rob Koczkar returned to the asset class with Adamantem Capital – but brought strong beliefs on sustainability and inclusion with him.
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DEAL FOCUS

NFT START-UP DECLARES WAR ON INTERNET

Hong Kong's Animoca Brands is at the forefront of securing digital property rights via cryptographic tokens. The concept is germinating in the games sector, but it is expected to change everything.
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DEAL FOCUS

NAVIS TARGETS HOSPITALS IN THE HINTERLANDS

The Southeast Asian manager will commit up to $100 million to hospital roll-up strategy intended to address rising demand for private healthcare in Malaysia's underserved territories.
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DEAL FOCUS

NEW ANGLE ON LOGISTICS FLOURISHES IN CHINA

China's DST Car Rental has achieved a level of vertical integration unique among start-ups in electrified logistics. With the model proving itself at home, an overseas expansion awaits.
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DEAL FOCUS

NOVO SPREADS ITS WINGS IN SOUTHEAST ASIA

In Hummingbird Bioscience and Halodoc, Novo Holdings believes it has backed a potential global leader in hard-to-drug cancer and a likely domestic champion in telemedicine and disease management.
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SEEN AND HEARD

THE ESG FACTOR IN EXITS

Nearly three-quarters of GPs expect an environment, social and governance (ESG) premium for businesses that they are considering exiting based on specific ESG qualities, according to EY's global private equity divestment study. Social impact policy, including diversity and equality commitments, is the key priority globally in efforts to capture this premium. Diversity metrics scored low by comparison. Meanwhile, respondents in Asia Pacific placed more emphasis than their peers in other markets on courting buyers with a strong ESG track record.
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SEEN AND HEARD

ARE YOUR DEALS INSURED?

Asia Pacific-based transactions accounted for 5.7% of global M&A insurance in 2020, a slight year-on-year decrease, according to BMS Group. The North America and Europe shares were 45.3% and 26.7%, respectively. Australia and New Zealand aside, M&A insurance is still in its infancy in Asia, due to a lack of familiarity with risk transfer solutions. However, financial hubs such as Singapore, Hong Kong, Seoul, and Tokyo have witnessed an increasing level of regularity and sophistication in its usage.   
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The rest of the week

FUNDRAISING

• China's Meridian raises $330m for renminbi fund

• Japan's UTEC seeks $275m for Fund V

• Japan's CyberAgent raises $55m for latest VC fund

DEALS

• Anchor invests $550m in Japan unit of Korea's Kakao

• Ocean Link, Sequoia seal China hotel operator take-private

• Alibaba, Baring Asia back Masan's Vietnam grocery push

• Korea's Centroid rallies local support for TaylorMade buyout

• China online education player Zhangmen targets US listing

• Advantage backs Japan coffeeshop chain

• Indonesia's TaniHub secures $65.5m Series B

For your calendar

UPCOMING EVENTS

• May 27 - AVCJ Vietnam Forum

• June 2 - Infrastructure Investors Forum: Energy & Renewables Asia

• June 23 - AVCJ Chinese PE & VC: The outlook for Q3 and beyond

• July 26-28 - AVCJ Australia & New Zealand Forum

• August 2 - Infrastructure Investors Forum Asia

• August 3-4 - AVCJ Singapore Forum

• August 5 - Southeast Asia M&A Forum

Regional Reports

Industry Review

Weekly digest - May 26 2021

Asian GPs slow implementation of ESG policies - survey

Singapore fintech start-up LXA gets $10m seed round

India's InCred announces $60m round, claims unicorn status

Insight leads $50m round for Australia's Roller