Posts Tagged “SuperReturn Asia”

Spotlights series: Ben Simpfendorfer explains his ‘New Silk Route’ theory.

January 6, 2020

Ben Simpfendorfer, Chief China Economist, Royal Bank of Scotland, was a guest speaker at SuperReturn Asia 2010 on the New Silk Route.

In an interview with Beverly Chandler, SuperReturn Asian reporter,  Ben Simpfendorfer explains his ‘New Silk Route’ theory.

Post Under: Asia

SuperReturn Asia 2010 - A complete round up of news and views

October 4, 2020

SuperReturn Asia is the “must attend” annual private equity and venture capital conference for the region.  The 2010 event continued that tradition.    We would like to thank all the delegates, speakers and sponsors and look forward to bringing you an even more energised event in 2011.

In addition to the coverage of the event by Beverly Chandler,  we’ve gathered the leading articles and commentary from the business news websites to give you a comprehensive review of this years hugely successful event.

We have captured a series of video interviews with some of the industry leaders which will be posted on this site over the coming weeks.   To make sure you don’t miss out, either add the RSS feed to your reader or sign up for email alerts.

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A Twitter Overview:

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@LPlatform: The poll at SuperReturn Asia Conference showed that 51.7% of professionals believe China will bring the best returns in the next 3 years.

@SuperReturn: Ben Simpfendorfer,RBS gives fascinating talk on new silk road in hk #sra10 More here http://ht.ly/2M9Ft (via @SuperReturnSara)

@SuperReturnSara: Jin Liqun, CIC says it is still expected for capital to flow uphill from developing countries to developed #sra10

@SuperReturnSara: Anil gupta, insead could chinese capital do investment into india infrastructure and aid investment? #Sra10

@SuperReturn: Liqun says the Chinese have been students learning from the West: “Now you should learn something from us.” #SRA10

@SuperReturn: If foreign investors work closely with locals they will have a very good time investing in China says CIC’s Jin Liqun. #SRA10

@SuperReturn: China is the undisputed powerhouse for global economy says Jin Liqun of the CIC. #SRA10

@HelenHChan: The West is 450 bn dollars short of capital and Asia is 115bn dollars long in capital, says Paul … http://tmi.me/1MsYM

@SuperReturn: Melissa Ma of Asia Alternatives reports valuations are back to recent peaks #SRA10

@NorthusSuperreturn asia just started. Fascinating talk by jonathan anderson,ubs. Emerging markets are going to win

@Northus:  Good morning from SuperReturn Asia where UBS’s Jonathan Anderson and Paul Schulte of CCBI are crystal ball gazing on the economy. #SRA10

@SuperReturn: The West is 450 bn dollars short of capital and Asia is 115bn dollars long in capital, says Paul Schulte, China Construction Bank. #SRA10

@SuperReturn: Property boom in China is crucial to understanding the area says UBS’s Anderson. Property prices 135 per cent up over decade. #SRA10

@SuperReturn: The emerging world is growing at 7. 2 per cent says Jonathan Anderson of UBS and Asia will continue to for 5 to 7 years. #SRA10

@SuperReturnSara: Too much money chasing too few deals? Being discussed now at #Sra10

@Northus: Jin Liqun, CIC says it is still expected for capital to flow uphill from developing countries to developed #sra10

@HelenHChan: Jin Liqun of CIC says China’s #SWF seeks long term, risk adjusted returns #SRA10

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Reuters - CIC to avoid defense, casino investments

China Investment Corp, China’s $300 billion sovereign fund, will stay clear of investing in defence, casino and alcohol-related sectors, a senior official told a private equity conference on Wednesday.

“We will not do anything that has a reputational risk for us,” CIC supervisory board Chairman Jin Liqun said in an address at the Super Return Asia 2010 conference. more here.

Reuters - Asia PE funds flush with cash, desperate for talent.

Asia’s private equity (PE) industry is sitting on a cash pile, estimated at $50 billion, but a shortage of experienced fund managers is a big worry for the sector.

A snap poll of about 250 PE experts at Super Return Asia 2010 conference showed that about 44 percent considered too much cash as the biggest risk to the industry, followed by absence of experienced fund managers. more here

Wall Street Journal - CIC among biggest investors in 3i Eur 1.2B growth fund

China Investment Corp., the country’s $300 billion sovereign-wealth fund, was one of the biggest third-party investors in 3i Group PLC’s (III.LN) EUR1.2 billion growth capital fund raised earlier this year, a person familiar with the situation said Wednesday. more here

Bloomberg - China’s foreign buyout investments slow on local competition

Foreign private-equity investment in China has slowed as competition from domestic funds pushed asset prices higher, said Antony Leung, chairman for Greater China at Blackstone Group LP.

Some local funds are more aggressive and tend to outbid overseas buyout firms, Leung said in an interview at the SuperReturn conference in Hong Kong today. The absence of a capital shortage and demands for higher valuations for assets also pose challenges to foreign private-equity funds, he said. more here

Post Under: Asia

The New Silk Road

September 17, 2020

An Article by Ben Simpfendorfer, Royal Bank of Scotland

Ben Simpfendorfer, Chief China Economist, Royal Bank of Scotland will be a guest speaker at SuperReturn Asia 2010 (27-30 Sept) Hong Kong

China and the Middle East are two historic  powers. Yet, their modern economic relationship wasn’t resurrected until after 2001. The relationship has since grown rapidly and is illustrative of the rebalancing taking place in the global economy.

The number of Arab traders visiting China surged around this time. Yiwu, a small Chinese coastal town south of Shanghai, receives 200,000 Arab visitors annually. It is a virtual Arab market town. China’s entry to the WTO in 2001 was an important explanation for the rise in Arab visitors. Equally important was the surge in oil prices after 2004 and the relaxation of China’s visa policies even as the developed economies tightened their own.

The results are evident in trade flows. China overtook the United States as the world’s largest exporter to the Middle East in 2008. It was the first time the United States had lost its number one position since the 1960s. Certainly many of China’s exports to the region are consumer goods, often made by foreign subsidiaries, but they are also increasingly accounted for by capital goods, from automobiles to port cranes.

Yet, these exports may equally produce instability in the Middle East. They are resulting in factory closures and jobs losses, troubling for a region in which 60% of the population is under the age of 30. It is not all bad news, however. There are tentative signs that China is building factories in the Middle East, from Egypt to Saudi Arabia, hoping to profit from the region’s strong trade ties to Africa and Europe.

The relationship is not only about what China sells to the Middle East, but also what it buys. China imports half its oil from the Middle East. Its dependence will only grow in time as domestic oil production peaks. By 2030, the Middle East is expected to provide every two out of three barrels of oil that China consumes. The upshot is that China is starting to take a new interest in the Middle East’s security.

Islam is a more delicate topic. But it is also easily misunderstood. China’s Muslim population is targeting the Middle East as a potential market for Halal food and Muslim clothing. Prime Minister Wen Jiabao, while speaking at the Arab League Headquarters in Cairo last year, was also keen to emphasize that fact that China has 35,000 mosques and requires Halal food to be served in public offices.

These two historic powers also see a symbolism in their simultaneous rise. Centuries ago they rose together as trade flourished along the Silk Road. They also fell together, as Europe took their place as the world’s dominant economic power. The return of the Silk Road, even if only figuratively, has thus reinforced the impression that China and the Middle East may yet reclaim their former glories.

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Ben will discuss China’s strengthening relations with the Arab world.  He will examine the rapid growth in trade and investment links between the two historic powers, explore the importance of oil and Islam, and speak about China’s role as a growth model for the region.  His views are based on extensive research in such cities as Beijing, Shanghai, Cairo, Dubai and Riyadh.

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About Ben Simpfendorfer, Chief China Economist, Royal Bank of Scotland.

Ben Simpfendorfer is Chief China Economist for Royal Bank of Scotland, Hong Kong.  Prior to this, he worked at JP Morgan Chase, Hong Kong as Senior China economist.  Ben speaks Arabic and Chinese, and has lived in Beirut, Damascus, Beijing and Hong Kong.  His editorials have appeared in the Financial Times, Wall Street Journal Foreign Affairs and the Internal Herald Tribune.  He is the author of “The New Silk Road: How a rising Arab world is turning away from the West and rediscovering China”,  published by Palgrave Macmillan in 2009.

Post Under: Asia

Spotlight Series: Derek Sulger, Lunar CM looks forward to debating the pitfalls of PE in China

September 15, 2020

Derek Sulger, Managing Partner, LUNAR CAPITAL MANAGEMENT will be an expert panellist in a debate moderated by David Lee, Co-Founder & Managing Partner, CLARITY CHINA PARTNERS, entitled “Vulnerabilities & Pitfalls For Private Equity In China: Evaluating The Risks, Experiences And Opportunities”.  He will joined by Kathy Xu, Managing Partner, CAPITAL TODAY; Vincent Chan, CEO & Co-Founder, SPRING CAPITAL ASIA; Neil Shen, Managing Partner, SEQUOIA CAPITAL CHINA and Yichen Zhang, CEO, CITIC CAPITAL.

In an interview for the Spotlight Series, Derek explains why growth capital is seen as the largest PE segment in China and the challenge for LPs to become more operationally involved.

Post Under: Asia

How Active Are GPs in Portfolio Companies?

September 10, 2020

Recent Research on Asia Private Equity by Grant Fleming, Partner, Continuity Capital Partners

Grant Fleming, Partner. Continuity Capital Partners will be speaking at SuperReturn Asia, 28 – 30 September 2020 in Hong Kong

The last ten years of Asian private equity has witnessed substantial growth in the number of firms, assets under management, and contribution of private equity to M&A activity. We have seen the emergence of large public-to-private transactions, a scalar change in the size of local private equity markets in China and India, and private equity professionals develop and hone skills consistent with global best practice.

Institutional investors in private equity are more discerning about manager selection, favouring firms where there is clear evidence of active equity ownership by private equity managers in their portfolio companies (leading to demonstrated excess returns above listed equities). Our understanding of how active Asian GPs are in portfolio companies has been improved recently by several studies, which we describe below.

Academic studies on U.S. and European private equity have found that private equity owners are active owners. Private equity backed firms are more likely to be involved in M&A, and to perform better than industry competitors. GPs also hold company management accountable for financial and operational performance. As a result, it is not uncommon for LBO companies to have turnover at senior management positions (see Acharya, Hahn and Kehoe 2009). Venture capitalists have been found to add value to portfolio companies through strategic advice, access to networks and aiding the “professionalization” of start-up firms (see Hellman and Puri 2002).

Until recently there were no large sample, empirical studies on whether Asian GPs are active in their portfolio companies to the same extent as elsewhere. That has now changed. The recent research tells us the following:

  • Asian GPs are active owners of companies, helping shape strategic and operational change Cumming, Fleming, Johan and Takeuchi (2010) analysed over 400 Asia transactions over the last 20 years to provide the first evidence on operational change instigated by Asian GPs in companies. Asian LBOs are more likely to involve acquisitions than divestitures, a contrast to the U.S. and Europe where corporate restructuring through divestitures has been a common activity for GPs. Companies operating in the growth markets were very active in acquisitions - China (85% of firms made an acquisition), South Korea (85%), Taiwan (73%), and India (70%) - although Asian GPs operating in slower growth “developed” economies also had made their fair share (e.g. Australia: 52%). Divestitures were less common than acquisitions in all markets, with usually only about 10% of firms in each country divesting divisions.
  • Corporate governance improves following a management buyout Li, Wright and Scholes (2010) studied 19 Chinese management buyouts to see how corporate governance changed post-buyout. Changes were noted in several areas. First, board size decreased from, on average, 11 people to 8 people. Second, the proportion of independent directors increased from less than 10% of the board, to over 40%. And finally, there was an increase in the frequency of board meetings. In sum, management buyouts improved corporate governance and moved these firms closer to international best practice.
  • Asian management teams are held accountable to performance targets − Cumming, Fleming, Johan and Takeuchi (2010) also examined management turnover. They found that Asian GPs instigate managerial turnover in about one third of Asian LBOs (i.e. a change in CEO, chief financial officer, and/or chief operating officer).  Also, there was no difference in management turnover between “growth capital markets” such as China and India, and “LBO markets” such as Japan and Australia.  Private equity ownership is active ownership despite the structure of local labour markets, or other cultural factors which may a priori lead one to believe that turnover of senior management is difficult.

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The Asian private equity market is still young in its development, and Asian GPs often still need to sell the virtues of private equity ownership to entrepreneurs and management teams. This new research gives prospective private equity recipients, and investors in the asset class, additional insight on how Asian GPs behave, and whether they are implementing value adding, active equity ownership in private companies. That Asian GPs show that they are just as likely as elsewhere to be active owners alongside management bodes well for the growth of private equity as an attractive form of equity ownership in the region.

Grant will chair the Private Equity Strategies day at SuperReturn Asia 2010 (27 -30 Sept), which will look at buyouts, the capital growth outlook and what is the next hottest market in Asia?

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About Grant Fleming, Partner, Continuity Capital Partners

Grant has worked in illiquid asset markets in Asia for 10 years, with particular focus on private equity, and credit and distressed opportunities.

Grant began his work in finance markets while an academic at the University of Auckland and the Australian National University. Between 1989 and 2001 he lectured on economics, business history, corporate finance and private equity, and led a series of research projects on analyzing the development of business in the twentieth century, and the empirical analysis of private capital markets. He has authored over fifty academic articles and two books, and continues to publish in scientific journals.

In 2001 Grant joined Wilshire Associates Incorporated, researching and building Asian private equity and distressed debt portfolios for a global investor base located in Australia, Japan, U.S.A and Europe. He was also a member of the firm’s global investment committee and led the private market division’s research program. Between 2006 and 2010 was located in Japan, establishing the firm’s North Asian research team.

Grant holds Bachelors, Masters and PhD degrees in economics from the University of Auckland

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Further Reading

Acharya, V., Hahn, M. and Kehoe, C. (2009) “Corporate Governance and Value Creation: Evidence from Private Equity” NYU Working Paper No. FIN-08-032. Available at SSRN: http://ssrn.com/abstract=1354519

Cumming, D., Fleming, G.,  Johan, S. and Takeuchi, M. (2010) “Corruption, Legality and Buyout Returns” paper to Law, Ethics and Finance Conference, York University, Canada, 16-18 September.

Fleming, G. and Takeuchi, M. (2010) “Leveraged Buyouts and Control Oriented Investments in Asia” forthcoming in D.J. Cumming, ed., Handbook of Private Equity (Oxford University Press). Available at SSRN: http://papers.ssrn.com/abstract=1577471

Hellman, T. and Puri, M. (2002) “venture Capital and the Professionalisation of Start-Up Firms: Empirical Evidnce” Journal of Finance, vol. 62(1), pp. 169-197.

Li,Y., Wright, M. and Scholes, L. (2010) “Chinese Management Buyouts and Board Transformation ” paper to Law, Ethics and Finance Conference, York University, Canada, 16-18 September.

Post Under: Asia

Spotlight Series: Rebecca Xu, Asia Alternatives Management on attractive markets post crisis

August 19, 2020

Rebecca Xu, Co-Founder & Managing Director, ASIA ALTERNATIVES MANAGEMENT will participate in a panel debate entitled “What is the next hottest market in Asia?” moderated by Sanju Vaswani, CEO, VERNY INVESTMENTS.  Joining her will be Patricia Dinneen, Managing Director, SIGULER GUFF & COMPANY; Lam Nguyen – Phuong, Co-Founder & Senior Managing Partner - Global Private Equity, CAPITAL INTERNATIONAL, INC;
Nicholas Bloy, Co-Founder & Managing Partner, NAVIS CAPITAL PARTNERS; Peter Kennedy, Managing Director, CLSA CAPITAL PARTNERS.

In an interview for the Spotlight Series, Rebecca contends that global financial crisis has had a positive impact on investments in Asia making it one of the most attractive markets today.

Post Under: Asia

Spotlight Series: Veronica John, IDFC Capital on evaluating new funds

August 16, 2020

Veronica John, IDFC CAPITAL will moderate a panel entitled “Evaluating First Time & Sector Specific Funds – What To Look For And What To Avoid?” at this years SuperReturn Asia.  Joining her will be Anubha Shrivastava, CDC GROUP; Johanna Klein, ADB; Gordon Hargraves, RHO FUND INVESTORS and Joachim Schumacher, DEG.

In an interview for the Spotlight Series, Veronica gives some insight into what she looks for when evaluating funds from track record, team dynamic to diversification of investment pipeline.

Post Under: Asia


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