Talking points: 2018 in quotes

GLOBAL DEPLOYMENT DILEMMAS

"You cannot sit on the money just claiming everything is very expensive so let's wait another year. The way to manage the cycle is by pacing your investments. If you just wait, that by definition implies that you know how to time the market and you know where the market is going to turn, and I think that's a mistake"

Nikos Stathopoulos, BC Partners

"We're questioning more now whether this is a strategic move to try to put money to work that you wouldn't normally put to work, or invest in strategies at the time in the market that you feel is important versus what we signed up for. I think the better firms and relationships have been strengthened through this process of real engagement between LPs and GPs"        

Bryan Lewis, PennSERS

SPIN-OUTS & STABILITY IN CHINA

"Maybe part of China's culture does not tolerate that kind of true partnership. The important factor is the founder has a sound mind and knows to bring in people who have strengths he doesn't have. There also need to be checks and balances so it's not one person making all the decisions … I spent way more time than before evaluating human nature. It means I can predict their behavior more easily than by studying what they have accomplished before"

Sally Shan, HarbourVest Partners

"It's a window of opportunity for LPs because these new funds represent new strategies, new thoughts, and renewed motivation to work extra hard to build reputations from the ground up. We need to think about how we can capture this part of the value and how we can provide support to make sure these GPs contribute to economic growth and technology innovation. On the other hand, trying to evaluate a GP is very complicated in China"

Xiaochen Li, Taikang Life Insurance

"The key question I have for Asian GPs is their capacity to retain talent. It is something we monitor when tracking potential GPs … so when they do come to market we are informed as to how the team has evolved"

Dave Brochet, CDPQ

TALENT CHALLENGES IN ASIA

 "LPs don't like to see firms grow their fund size and continue to raise more and more capital, and so they're always pushing back on that. But as you grow your firm and assets under management there's more and more opportunity for your team to grow. You can promote people, you can create room for young talent to rise, and you can create new product areas" 

Jean Eric Salata, Baring Private Equity Asia

"There's a lot of talent and expertise in a firm like Accenture. You may have 20 people in your firm, but you're never going to match the 2,000 people they have across the world. It's not that there's no room for that, just that trying to balance between in-house resources and external talent is a challenge around the world"

K.Y. Tang, Affinity Equity Partners

"This industry has grown tremendously over the last 20 years, far outpacing the talent pool growth. As a result, anybody who has a few years' experience and a good track record is in greater demand today, not only within our industry, but also from outside – increasingly we see start-ups and technology companies actually try to grab our people away"

Ming Lu, KKR

CORPORATE VCs & DISRUPTION

"We are trying to build out digitization of the corporation. For a big company with 200 subsidiaries it is a considerable effort to make digitization part of our DNA. One strategy is to embrace digitization in our investments"

Meliza Rusli, Astra International

"If someone is going to be disrupted we would rather be the disrupter. We invested in Zalora… because we decided the company would disrupt our malls business in the Philippines. We wanted to be part of it, learn from it, and see how we could future proof the malls business"

Michael Montelibano, Ayala

"Real estate is pretty traditional, but we have come to realize that start-ups have gone from retail and entertainment to the domain sector for enterprise productivity. As a real estate player with a lot of domain knowledge we're going to leverage that and get technology companies to work with us"

Yoke Kee Ang, Mah Sing Group

KOREAN LPs & CORRECTIONS

"What if something happens like 2008? We always go over this question and we have to be ready to respond. Pursuing an absolute returns strategy, we cannot afford not to do alternative investments. But we want to focus more on liquidity"

Dong Hun Jang, Public Officials Benefit Association

"It is difficult to predict what the future will look like, so we are diversifying our investments"

Seung-Ho Kim, Hyundai Marine & Fire Insurance

"We don't know when the correction will come but we want our portfolio to be solid … The most important consideration is where does a deal come from. Is it from a GP we know and have performed due diligence on? When new GPs propose co-investment, in most cases we don't know them, so it takes us more time to evaluate them. And we will apply more haircuts [to valuations]"

Jay Huh, Korea Investment Corporation

VALUATIONS IN VIETNAM

"Vietnam was attractive for us because the foreign exchange was stable and that stems from social and political stability, growth and fiscal management. It was not saturated with PE investors and you could find gems in the rough. The window of lower competition for good assets is shrinking if not gone"

Pete Vo, CVC Capital Partners

"Has the exuberance run too far in terms of valuation? Pricing on private deals is several turns higher than it was two or three years ago"

Paul DiGiacomo, BDA Partners

"We have seen businesses that are growing 50%, 80%, 90% a year. Banks in Vietnam have seen 40-80% growth. Is that sustainable over the next 2-3 years - probably not, but you can still average it down and justify some of the valuations"

Andy Ho, VinaCapital

VENTURE CAPITAL EXITS

"We're just getting to the point now where the quality companies that got funded early on are proving themselves and starting to broaden out their options. And we're also seeing a broadening of the type of investors who are paying attention. It may not be a Southeast Asia-specific exit; it could be people from other parts of Asia or global capital pools" 

Shane Chesson, Openspace Ventures

"What has been quite remarkable for India, certainly in the last three or four months, is that you've seen big trade sale exits – obviously Flipkart is the one that people talk about – but you've also seen domestic IPOs of VC-backed companies. With Southeast Asia being a slightly less mature market compared to India I would expect that over the next couple of years we're going to see the same trends here"

Dominic Goh, HarbourVest Partners

"It's going to be a hybrid exit strategy. The number of our Indian founders that have Beijing and Tokyo stamped on their passports has increased tenfold and that's very positive. We're seeing these companies thinking about going global from day one"

Sanjay Nath, Blume Ventures

JAPANESE LPs & DIVERSIFICATION

"Just by increasing the number of GPs doesn't mean you have achieved effective diversification, you need a lot of different strategies and timeframes. Within this matrix, you have to establish what is the appropriate picture of diversification"

Shuzo Takahashi, Pension Fund Association

"We don't pay attention to the number of GPs or funds. We seek diversification by region, invest in the managers we want to do business with, and after the fact we see the number of GPs"

Tadashi Nishizawa, Japan Post Bank

"We are investors but at the same time, we are subject to selection by asset managers. If a fund is very popular, interest might be two or three times more than the capacity. As a new LP, to ensure a certain level of allocation we have to do marketing activities and convince GPs that we can be a long-term partner for them"

Tadusu Matsuo, Japan Post Insurance

TAIWAN START-UPS

"Some start-ups in Singapore and Israel that have holding entities in their home countries but generate most of their revenue from overseas markets. Taiwanese entrepreneurs should follow suit. With the beneficial conditions Taiwan has, it should be a very good first step for local start-ups to test if their models are viable and then replicate them in other regions"

Jacky Wang, 500 Startups

"When we launched the website, we first developed English, Korean and Japanese language versions, and a Chinese version was added later. Looking back, I think we made the right decision because businesses in Taiwan like start-ups that have international exposure and can bring them a more diversified clientele"

Ming-ming Chen, KKday

"Companies we like must not only have cutting-edge technologies but also have the capacity and willingness to expand overseas"

Tina Cheng, Cherubic Ventures

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