Asian private equity to return to full force in 2012?

In this issue, our editorial team looks back at some of the key trends of 2011 along with supporting statistics from our research team. Top amongst the figures is the fact that Asian fundraising has reemerged from the depths with more than $46 billion raised in the past year.

Barring the effects of the ongoing debt situation in Europe, it is likely 2012 will exceed 2011's fundraising figures as many of the big-name regional and global funds are returning to the market with at least one offering - all likely bigger than their previous vehicles, at the minimum to account for inflation and the relative decline of the US Dollar which most Asian funds are denominated. (For a full report, please read the article on page 6)

On investments, the recovery remains slower than on the fundraising side. Unsurprisingly, China remained the top designation. (See story on page 8) Like most trends, there are a number of reasons for the slow investment recovery. One of these would be the fact that, as mentioned earlier, many GPs are readying new funds and are focusing their energies in preparing for that, most importantly exiting their current batch of investments to get their IRRs and return figures in good shape.

Another key trend that has emerged - and has impacted both the investment and exit parts of the statistics - is the increase in the number of secondary buyouts. This has been an ongoing phenomenon although the deals recorded this year, such as the Bain Capital transactions in Australia (MYOB) and Japan (Skylark), have been higher profile.

Obviously, there are a number of reasons why private equity firms would sell their existing holdings in a company and as one senior regional buyout veteran says: "I have no problem buying from other GPs if their reason for selling is a reasonable one." Although there are obviously issues and risks with each investment, GPs tend to agree that existing portfolios of other GPs tend to be easier to manage.

Other trends for 2012? Southeast Asia is looking to heat up as a market for private equity. We've seen plenty of evidence this year, particularly in Indonesia, where a number of the regional majors are making their presence felt. Malaysia and Singapore are also likely strong investment destinations.

Finally, one trend that will likely (or should) happen is private equity having better communication. By this, I don't mean just investor relations but communicating with the market on the virtues of private equity. All major GPs now have experienced in-house professionals handling the firm's media and public communications. This trend is likely going to continue as private equity continue its evolution.

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• Topics
• Fundraising
• Exits
• Buyouts
• Fundraising
• buyout
• Exit