Leaving AVCJ

I joined AVCJ as Managing Editor in spring 2004 when AVCJ was run out of two offices in the Tung Wai Commercial Building. And I leave it as Managing Editor with AVCJ Group occupying much of an entire floor in Admirality Centre, a few hundred metres westward down the same route.

AVCJ in 2004 reflected the industry it served: small, somewhat cranky, highly individual, with the air of a small band of devotees to a rather neglected sect. Private equity and venture capital in the region had been through the blowout of the dotcom boom, and in Hong Kong, the subsequent impact of SARS, and was still near the bottom of its post-bubble dip. A pioneer in online publishing and digital magazine distribution, AVCJ had nonetheless not escaped the dotcom bust, and Dan Schwartz was leading the business with the determination of a prophet in the wilderness, working out of conditions that contrasted sharply with the glittering, five-star events that he and the team still managed to pull off.

All the same, for those with even longer memories, AVCJ had gone through worse times, post the 1997 Asian financial crisis, and had stuck with the industry with a relentless dedication that, soon after I joined, came good. The 1997 crisis that decimated an entire generation of private equity and VC investors had sown the seeds of the industry’s eventual recovery and revitalization, as the crisis-era investments in Japan and Korea began to pay off with exit results that put Asia on the global private equity map. The listing of Shinsei Bank in February 2004, which David Rubenstein of Carlyle described as “possibly the most profitable private equity deal of all time,” was only the biggest headline result from a series of outcomes that brought new leading global firms into the region, and rewarded those, like Carlyle and TPG Capital, that had laid long and deep bets on the market, nurturing local teams and offices since the 1990s. KKR, Blackstone and others followed them into the market, and, as business picked up and Asia Pacific became a key beneficiary of the 2005-08 “golden age” of leverage-driven private equity, AVCJ was able to move out of its cluttered, characterful premises in Wanchai for larger offices in Mass Mutual Tower.

Even back as early as 2005, right at the start of the credit boom, there were warning voices saying “it can’t stay this good for ever.” But for a long while, the market did stay golden, never rising to the giddy heights seen in the US and Europe, but certainly enjoying its share of the glory days. It was at this point that Incisive Media won out over other suitors and acquired AVCJ Group Limited, closing the deal in June 2006, inaugurating another new stage of development for the company. Dan Schwartz kept the position he had held since 1993 and remained as AVCJ Chairman and CEO under Incisive. Soon after, in 2007, AVCJ made another move further down the road and up in the world, to the Incisive Media offices on the 20th floor of Admiralty Centre.

By this time, Asia’s private equity industry was growing so strongly that it took the worst global financial crisis since the 1930s to crimp it. From late 2008 and into 2009, the region has faced the same difficulties as peers the world over – but fortunately, in Asia, the underlying macro conditions and the micro structures of the region’s private equity industry have kept growth on track and allowed it to weather the GFC in far better shape than elsewhere. AVCJ likewise saw some difficulties, but overcame these swiftly.

Asia Pacific private equity is now in a very different place from where it was back in 2004, and looks ready for even more dramatic changes and developments. How is the global eastwards shift of economic power going to be reflected in the local evolution of private equity? Is this already materializing in the new PRC RMB ecosystem? Will the Asian industry in ten years, or even five years, look anything like the private equity sector we know today?

All questions for the future. For the present, I leave AVCJ in good hands, with many fond memories from years of following and assisting with the development of the private equity industry across Asia Pacific. I look forward to continuing to follow its fascinating story in years to come.

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