Asian Private Equity Report Asia Private E

Although fundraising conditions remain challenging around the globe, Asia-focused funds on the road are showing considerable momentum, with many having already held interim closes, and the market is welcoming back many large players that have launched new funds, according to the latest data from Preqin.

Though North America and Europe remain dominant markets in the private equity sphere, growing opportunities in Asia are attracting fund managers and investors alike. Asia-focused fundraising began to gather momentum in 2004, when 95 funds raised an aggregate $14.4bn, representing three times the average capital raised annually from 2000 to 2003 in the region. Fundraising in Asia continued to accelerate, reaching a high of 225 funds closing on an aggregate $84.4bn in capital commitments in 2008.

However, following the financial crisis Asia-focused private equity fundraising experienced a dip that paralleled the one taking place in global private equity fundraising, with 159 funds closing on an aggregate $30.8bn in 2009, less than half the capital raised in 2008. However, fund managers and investors alike seemed to regain confidence in Asia’s private equity market fairly quickly. In 2011, 207 Asia-focused funds closed on an aggregate $52.7bn, approaching fundraising levels seen before the financial crisis. Despite the fact that Asia’s private equity market is still developing, confidence in the opportunities available in the region has encouraged fund managers to return to the area when launching new funds, particularly as investor interest in the region continues to rise.

Fundraising success in Asia has also lead to growth in the private equity deal market in the region since 2009, in spite of the challenges faced due to the turbulent global economy. In particular, deal flow in Asia witnessed noteworthy gains in late 2010 and into 2011, with Q4 2011 representing a post-Lehman high for aggregate deal value in the region. Despite a decline in deal value in Q1 2012 due to tightening credit markets, the 216 deals valued at $7.9bn in Q2 2012 represent a post-Lehman high for the number of deals in Asia. This currently thriving deals market in Asia contrasts significantly to the situation in Europe and the US, where deal volumes remain depressed post-financial crisis.

As investors increasingly show an interest in Asia, and fund managers launch vehicles to target that interest, the region will likely continue to challenge the traditional private equity hubs of North America and Europe. Though the Asian private equity market was impacted by the aftermath of the financial crisis, the resulting fallout for the region seems less significant than in other parts of the world, and positive economic growth has been shown in recent years. The Asian private equity market’s ability to recover and resume growth is undoubtedly attractive in a time when economic uncertainty and its impact on private equity investments remains a key issue for fund managers and investors alike. However, performance data shows that many funds still face similar challenges to their counterparts in more developed markets. Despite the growth of Asia’s private equity industry, the large number of funds in market represent a wide range of opportunities that may experience varying ranges of success, particularly given the current global economic climate.

Preqin is the leading source of information for the alternative assets industry, providing data and analysis via online databases, publications and complimentary research reports. Preqin is an independent business with 132 staff based in New York, London and Singapore serving over 9,000 customers in 72 countries. Preqin has built a reputation in the alternative assets industry for providing the most comprehensive and extensive information possible across private equity, real estate, infrastructure and hedge funds. Leading alternative assets professionals from around the world rely on Preqin’s services daily, and its data and statistics are regularly quoted by the financial press.

Breakdown of Deals in Asia by 2009-2012 (As of 7th Septem

70 60 50 40 30 20 10 0

2009 Venture Capital 2010 Buyout

Venture Capital Buyout

Growth Capital

2009 63% 22% 15%

Proportion of To 2010 56% 22% 23%

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