Leaving the mother ship: Asian professionals on their own

Twelve months ago the Asian private equity and venture capital market were all but silent. But over the last two weeks, a large number of movements in terms of hires, departures and more have been announced at a private equity firms.

The news includes First Reserve and Lexington Partners opening Asia offices, with Blackstone boosting its Down Under. Is this a sign that Asian firms are now beefing up their operations to gird themselves for a tremendous up cycle? Is the opportunity simply too good to miss this time?

Checking out the recent movements -- using the very helpful "people moves" category on our website -- it becomes apparent that one big driver is that private equity executives (and some bankers) are seeing this as an opportune time to go out on their own.

The entrepreneurial Chinese are leading the way. Many senior professionals are leaving their incumbent firms to start private equity houses focused on the mainland. Goldman Sachs has obviously been a big contributor to this reincarnating professional pool, but other firms have also been seeing deflections.

On the GS front, these include former Goldman China chiefs Fang Fanglei and Richard Ong, who were amongst the earliest movers when they started their Hopu Fund in 2007 with support from the mother ship and Singapore's Temasek. Then last year, Goldman's Greater China Chairman Fred Hu left his top banker job to create Primavera Capital (rumored to have already raised $800 million).

TPG Capital has also lost some star power. Last year, Weijian Shan had a brief fling with starting a private equity firm, thought it was an idea he later dropped to become CEO of up and coming private equity powerhouse Pacific Alliance Group, a partnership that is sufficiently entrepreneurial yet with existing infrastructure.

The latest is Mary Ma, who joined TPG in 2007. The well-respected Ma announced that she will be forming her own alliance with Louis Cheung, the retired General Manager of Ping An Insurance (which acquired TPG's stake in Shenzhen Development Bank) with operations beginning in March. Details are sketchy at the moment but it's reported the firm will focus on western-style buyouts in China.

India is also experiencing the same phenomenon, with senior executives likewise leaving established firms to make personal bets on the industry. The last few years have seen a number of high profile departures such as Ajay Relan leaving CVCI, Renuka Ramnath leaving ICICI Venture to start Multiples, and Ranjeet Nabha departing his post at WL Ross to start his own, yet unnamed group.

Has the focus on individual dealmakers and track records come full circle now? Is going out on your own the ultimate way to prove your worth?

Carlyle India head Rajeev Gupta is apparently exiting the private equity giant to return to the advisory business. He joined Carlyle in 2005 from DSP Merrill Lynch, where he was head of investment banking.

Just today it has emerged that Sequoia India has lost its core team with founders Sumir Chaddha and KP Balaraj reportedly leaving the famed venture capital firm with two long time colleagues to resurrect Westbridge Capital Partners. According to the Times of India, the four dealmakers will be taking 35 of Sequoia's existing Indian companies with them to their new venture, which will focus on listed and pre-IPO investments as opposed to the Sequoia's growth capital practice.

So it seems safe to say that senior professionals see an open window of opportunity, inviting them to strike out on their own. Meanwhile, many larger, established funds are still in the process of preparing their new offerings and as illustrated by the recent Baring Private Equity Asia fundraising, the institutional market is flush with capital for worthwhile funds. Good luck to all.

 

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• People
• Greater China
• South Asia
• Goldman Sachs
• Temasek Holdings
• TPG Capital
• ICICI Venture Funds Management Company
• The Carlyle Group
• Sequoia Capital