Weekly digest - September 27 2023
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27 September 2023
COVER STORY
Momentum behind responsible investment policies globally has begun to ruffle feathers in the US. Asian PE should see it as a relevant warning.
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TALKING POINTS
AVCJ AWARDS 2023 - NOMINATIONS CLOSE SEPTEMBER 28
The submissions deadline has been extended, giving industry participants until September 28 to put forward the firms, fundraises, investments, and exits they believe worthy of consideration. For more information, go to www.avcjforum.com/awards
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INTERVIEW
PROFILE: VENTURRA'S JOHN RIADY
 A millennial member of one of Indonesia’s most prominent family business groups, John Riady became a VC investor in 2011. He has witnessed a nascent digital economy begin to fulfil its promise.DEAL FOCUS
KKR MAKES AN IMPACT WITH GREENCOLLAR
 KKR helped GreenCollar take advantage of carbon credit markets that have become increasingly global and economically viable – and it took dozens of employees along for the ride.DEAL FOCUS
RIDING THE WAVE IN INDIA SINGLE-SPECIALITY HOSPITALS
 TPG Capital’s Asia Healthcare Holdings has tapped a rich vein for private equity in acquiring India’s only nephrology and urology hospital. Technological leadership will support expansion. |
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By the Numbers
AVCJ RESEARCH
GOING EX-ASIA
The headline numbers for private investment by Asian financial investors in markets beyond Asia aren’t necessarily that informative. They include mega deals – often in the utilities space – pursued by the likes of sovereign wealth funds. Indicative of national strategic priorities, perhaps, but not of the mindsets of independent PE investors.
Restricting the sample size to deals of USD 1bn and below is more helpful. Activity followed a gentle upward trend until 2021, when it spiked to USD 54.4bn. The USD 19.5bn posted in 2022 is in line with the eight-year average (excluding 2021), while USD 7.5bn has been put to work in 2023 to date. The context for these observations is ShawKwei & Partners’ recent rediscovery of the US market, more than 30 years after Kyle Shaw, the firm’s founder and managing partner, last dabbled there. Three deals have been announced in the past few weeks involving waste-reducing technology provider ZymeFlow, beauty packaging maker CTL Packaging USA, and battery components supplier Group14 Technologies. According to Shaw, US-China decoupling, tariffs, and a desire to reorient supply chains out of China have contrived to make North America and Europe more attractive markets for manufacturing and industrial services. Increased use of robotics is also making ex-Asia factories more competitive on a cost basis. North America consistently attracts the most capital on a geographical basis. The 60% share recorded for deals of USD 1bn and below for 2023 to date is not far removed from the 67% average for the prior eight years. Still, it is worth noting that Asian financial sponsors are also prolific investors in assets located in other parts of Asia, which may offer proximity, familiarity, and the promise of growth. ShawKwei is relatively unusual in its ability to tap into the supply chain diversification trend and follow it across borders. Asia has few dedicated industrial technology investors, while global sponsors – which may dip into this area from time to time – can be restricted because they are investing out of regional funds. A deal involving a US asset would likely have to pass through the US investment committee. Shaw believes these assets, ideally located in North America or Europe, are essential to pushing forward the Southeast Asia story. “Just having Southeast Asia isn’t enough, you need to add something to it,” he said. 
All of the trends featured here were sourced from AVCJ's proprietary database, AVCJ Research, featuring comprehensive information on private equity deals, fundraises and exits.
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