Emerging Asia to see more buyouts - AVCJ Forum

"There have been some fundamental changes in the private equity market," said John Lewis, CEO of Unitas Capital, a regional firm that focuses on both buyout deals and growth investments. "We are seeing more PE firms in the region and we are seeing an industry which responding to that with a proliferation of different strategies."

He explained that Unitas has recently come out of a five-year process during which it refocused its strategy towards operational value-add, which meant a greater emphasis on control.

"We believe that control can help achieve growth," Lewis added. "For example, if you are taking a restaurant concept that has reached a certain stage and you want to scale it up you need the capability to ensure you can make the changes in the company."

Mark Silgardo, a senior managing partner with IL&FS Investment Managers, noted a move toward control deals in India in particular.

"I think we are seeing buyouts becoming far more common in the Indian market," he said. "This is happening because there are both private equity firms looking to exit and, given the state of the Indian economy, more promoters are looking to refocus their business and willing to give up some control."

While these pockets of opportunity are indications of maturity in growth capital-dominated emerging markets, they still represent a small start from a low base. As Juan Delgado-Moreira, managing director and head of international at Hamilton Lane, noted, growth will continue to account for the bulk of deal value and volume.  

"If you approach the market wanting to do 80% control and 20% growth, you have allocated wrongly," he said.

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