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As Asia continue to mature as an investment destination, competition for deals is intensifying. If managers face the prospect of paying up for prize assets, they need to enter processes with conviction based on clear-cut value creation plans. Moreover, execution has to be precise in terms of timing, intensity or complexity, if the underwritten returns are to be achieved. In this session, experts offer insights into private equity investors apply operational expertise.
Japan has yet to rediscover the rich vein of large-cap deal flow that defined 2017, but the ingredients are all there. As a result, competition is tougher than ever before, with global and regional GPs piling in. Even the middle market occupied by domestic managers is attracting larger amounts of capital, as evidenced by increasing fund sizes. The challenge for all participants is to maintain investment discipline and strategy. Our industry stalwarts assess the landscape.
Global energy demand is expected to grow by 25% through 2040, with India and China accounting for the bulk of the additional consumption. At the same time, concerns about climate change have put pressure on governments to promote energy efficiency and increasing reliance on renewables. The opportunity for private equity seems obvious, given the long investment horizons. Our panel of energy experts identify where they expect to see growth, and challenges, in the years ahead.
Credit has generated much interest among LPs globally due to its typically yield-based returns and downside protection, although the asset class has yet to realize its full potential in Asia. Success is contingent on understanding the dynamics – for example, how a change in the borrower landscape would impact lenders – in different geographies as much as the broader trade-offs involving terms, structures, and risk profiles. Leading investors offer their outlooks on the market.
Private equity investment in India reached a record high last year and the momentum has been maintained in the early months of 2019 even as other markets in the region stumbled. There are plenty of opportunities in growth-stage technology, but GPs are seeing more large-ticket transactions across multiple sectors. For all managers, delivering value means identifying deals beyond the mainstream that offer growth at attractive valuations. Our panellists discuss what’s next for India.
Cross-border strategies serve as a natural value creation tool, enabling GPs to help companies capture growth in new markets, achieve greater scale, and generate higher returns. Transactions of this nature are seldom straightforward in execution, given the cultural, political and regulatory challenges of integrating assets in different markets. On top of that, economic and policy uncertainty hangs over channels between Asia and US-Europe. Our expert panellists explain how investors get it right, and wrong.
It was always a question of when secondaries would gain traction in Asia, given the number of mature funds with assets that have yet to be exited. GP-led transactions have grown in volume, value and variation in the last couple of years. Standard restructurings have been joined by staples, strip sales, preferred equity, the consolidation of disparate assets into single portfolios, and the spin-out of single assets into dedicated long-hold vehicles. Investors assess the market.
Asian returns have been robust in recent years, but with a downturn widely expected, GPs might be left with difficult choices. Do they take money off the table as soon as possible or hold on in the expectation that value creation can deliver even higher returns? Pressure to make distributions and future fundraising are factored into these decisions. Our panellists offer thoughts on prepping exits – and how outside forces can ruin the best laid plans.
Co-investment is becoming a higher priority for LPs as they become more sophisticated, more knowledgeable of the markets they are investing in, and more desirous to reduce net fee exposure. However, the same adverse selection risks remain if GPs are given additional firepower to pursue deals that might be outside their sweet spot. In this session, industry experts delve into the issues surrounding this phenomenon and discuss the requirements for a successful co-investment programme.