Analysis >> Advisory
Asia leveraged finance: Institutional aspirations
PE firms can obtain financing for leveraged buyouts in Asia on increasingly favorable terms, but this doesn’t necessarily point to institutionalization – or at least, not yet. For now, banks still lead the way
PE and tech investment: Forward planning
The growing influence of technology across every industry is forcing PE firms to review approaches to investment. Ensuring the right people have the right information sits at the heart of these efforts
Warranty and indemnity insurance: The information barrier
Warranty and indemnity insurance is growing in popularity in Asia, particularly in emerging markets. A lack of understanding is the biggest impediment to its widespread adoption
Key person clauses: Man overboard
The complexity of a private equity firm’s key person clauses – and the number of people they encompass – says much about its institutionalization. The transition is not always easy, for GPs or LPs
ESG: Policy pitfalls
Environmental, social and governance management must be handled properly to leverage its promised performance improvements. Risks around poor execution cut across all aspects of private equity
Valuation standards: Counting their blessings
Asian GPs’ portfolio valuation practices remain largely opaque, despite the value of standard frameworks. LP demand will be key to moving the industry in a more transparent direction
Secondaries: Holding patterns
Advisory firms focused on private equity secondaries are confident that Asia will fulfill its potential as an expansion market for their services. They will not be able to effectively seize the opportunity remotely
Fund structuring: Change at the margins
While the Cayman Islands remains the go-to jurisdiction for PE firms seeking a domicile for Asia-focused funds, investor demand and regulatory remit mean structures are now more carefully considered
Financial institutions and fintech: Bouncing checks
Southeast Asia’s traditional banks have begun to take a strong interest in the financial technology environment, but their early-stage involvement in the ecosystem is still tentative
Asia fundraising: Retail channels
Private equity firms keen to diversify their LP bases are looking to establish relations with Asia’s high net worth segment, and the private banks and wealth managers who facilitate access to this community
Due diligence: Behind the curve
Gaining an accurate impression of an industry is vital for investors, but this can be difficult in markets where information is patchy or unreliable. Those who hope to prosper must learn to judge data carefully
Japan succession deals: The long game
Succession planning opportunities are growing in Japan’s middle market as a generation of founders bend to the will of time and commercial pressure. For GPs seeking buyouts, it is all about who you know
Hong Kong tax: A life less certain
Hong Kong introduced legislation intended to give private equity investors greater tax certainty, but the implementation guidelines have moved it further from this goal. The implications could be wide-ranging
Hong Kong tax policy: An unfortunate first
Hong Kong is the only major international center openly seeking to treat carried interest as income rather than capital gain for tax purposes. The private equity industry wants to know where it stands
Side letters: A little extra
The proliferation of side letter provisions submitted by LPs as conditional on their participation in a fundraise is adding to administrative workloads. Private equity firms must negotiate carefully
Fund T&C: Carrot and stick
Fee discounts and co-investment often dominate GP-LP discourse, but longer-term issues surrounding economics and governance are increasingly important to negotiations over some Asian GPs’ fund terms
The communicators: Investor relations in Asia
GPs in Asia are devoting more resources to investor relations in response to increased reporting requirements and a challenging fundraising environment. But finding the right IR formula is not easy
China fund administration: In or out?
Whether they are US dollar managers upgrading their LP bases or renminbi GPs tapping offshore investors for the first time, China PE firms increasingly see the reputational value of independent administration
The gathering storm: Preparing portfolio companies for a downturn
As warning signals of a global economic downturn become increasingly convincing, private equity portfolio companies are likely to come under pressure. Investors are advised to prepare carefully
Reputational due diligence: No stone unturned
Thorough reputational due diligence can find both potential deal-breakers and opportunities for improvement. Are PE firms taking it to the necessary depth in emerging markets like India?
Made to measure: Customized co-investment
Growing appetite for co-investment among foreign and local institutions in Asia has given rise to a wider variety of advisors offering customized solutions to those with limited in-house resources
GP communication strategies: Clearing the air
Communication strategies are becoming more important within PE as expectations for transparency grow. GPs must demonstrate an ability to maintain the trust of a range of stakeholders, not just LPs
The long game: Merchant banking-style PE
Ascendent Capital Partners’ China strategy involves advising companies first and raising the prospect of investment second, perhaps with a sizeable gap in between. Does this signal change in the middle market?
Going green: PE's environmental value-add
The private equity industry's approach to environmental value-add is evolving. The Environmental Defense Fund, KKR and The Carlyle Group discuss the various partnerships that underpin these efforts