Director's Notes 


Deal activity both from financial as well as strategic investors has picked up substantially this year, especially in the mid sized deal space. We have seen strength in Singapore, Malaysia and Indonesia, followed by Vietnam and Thailand. The sectors that have been in favor have been education, healthcare, consumer, services and a smattering across a variety of other sectors. US VCs have also picked up activity in the region and are spending more time and money on our shores of late, especially in the tech and fintech space.



The ASEAN PEVCA has facilitated over 1000 connections between business owners and potential investors, and over 450 connections between GPs and LPs, both within and outside the region. Many firms from outside ASEAN are establishing a base in the region, both on the institutional as well as fund side.



The ASEAN Economic Community (AEC) 2015 is at our doorstep. While all that was desired may not be achieved by December 2015, we are witnessing steps in the right direction. In addition, we have partnered with large and medium sized businesses in the ASEAN region to promote an enhanced playing ground to create a vibrant economic community. We have been promoting best practices and proposing new structures and instruments for promoting investment into the region. Many new opportunities are coming into play as strategic investors are increasingly look to do more.



Besides our regular activities, many new initiatives are growing with the pick up in activity in the region. We are launching an event series later this year, which we will send out more information on, as it gets closer. In addition, a EU-ASEAN initiative to promote co-innovation and network acceleration between EU & ASEAN businesses is under launch. A few others will be launched in the next quarter that will be announced as they happen. So watch out for this space!

Indonesia – The Good, the Bad and the Ugly 

By Bharati Bhargava


In the recent years, Indonesia has been a mixed bag of stories. Domestic growth averaged above 6.00% through 2010 until the last quarter of 2012. But from 2013 onwards, there has been a slowdown in this momentum and in Q1 2015, GDP growth eased to a five year low. Meanwhile, weighed by growth concerns and global developments such as concerns about normalization of the US monetary policy, the Indonesian rupiah lost a quarter of its value between 2013 and March 2015 and has been one of the worst performing Asian currencies.  However, even against this backdrop, S&P upgraded Indonesia’s rating outlook to positive from stable on 21 May 2015, with the possibility of being pushed up to investment grade in 12 months.
There have been many positive developments that triggered S&P’s upgrade in outlook. Firstly and most importantly, President Joko Widodo who took office in October last year was able to push for a rise in the price of subsidized fuel, freeing up nearly $8bn for other sectors.
Secondly, with declining oil prices, the new government was able to overhaul the fuel subsidies. Starting from 01 January 2015, Indonesia scrapped gasoline price subsidies and fixed the amount of the subsidy for diesel at 1,000 rupiah a liter for 2015. The above two changes significantly increased the funds available to develop other important sectors such as infrastructure. This was clearly evident as share of total subsidies in the 2015 revised budget went down to 12% from above 20% and share of capital expenditure shot up to a record high of 15% from slightly above 9.5% in the original budget.
Thirdly, there has been a visible improvement in the policy environment as Bank Indonesia, under the leadership of Governor Martowardojo, that has ensured policy credibility and effectiveness. Meanwhile, the central bank has adopted a series of macro-prudential measures such as loan to value ratio, motor cycle down payment rules, etc. to boost growth.
However, since the new president took control of the realm, not all developments have been positive. Indonesia has continued to move towards more nationalistic policies. The ban on mineral ore exports, instituted in January 2014, remains in place till today. The ban has led to undue confusion for mining companies and hampered work of international firms such as Newmont Mining.  According to World Bank estimates this policy would lead to a negative impact on net trade of $12.5bn and a total loss in fiscal revenues of $6.5bn during 2014-17.
Meanwhile, the weak regulatory and compliance environment has eroded non-tax revenues from the mining industry. To compensate, the government is mulling measures that could hurt domestic businesses at a time when commodity prices are already on a cyclical downturn. For example, the Indonesian government plans to raise coal royalty payments across the board to 13.5% from the current 3-7% charged to mining operation permit (IUP) holders. Though, the plan to raise royalties has been postponed (was expected to be implemented at the end of Q1 2015) due to strong resistance from small and medium-sized miners, it has highlighted drawbacks of a weak regulatory environment.
Currently, alongside the structural problems such as – acquiring land for projects and inflexible labor laws, Indonesia’s political landscape is not the most conducive for smooth functioning. The parliament is dominated by the opposition and worries of political stalemate hindering the progress of reforms are very real. Meanwhile, bureaucracy, corruption and lack of credit institutions have not only hampered effective implementation of new policies and reforms, but also delayed government expenditure. President Widodo had pledged to dole out roughly $22bn for an infrastructure stimulus program. But as of April 30 2015, only $541mn was spent on roads, bridges, ports and power grids.
There is a silver lining though. Given the background above, there is investment potential in two sectors: construction & construction allied industries and labor intensive manufacturing sector. The former should get support from higher government capital expenditure. So far, the government has spent less than 5% of its promised $22bn on infrastructure development and this expenditure is likely to accelerate in the coming years.
Meanwhile, the labor intensive manufacturing sector will gain as the commodity sector continues its cyclical downturn. Export oriented manufacturers that reinvest their profits domestically may have an advantage, as Indonesian authorities work towards steering the current account balance towards more sustainable levels. As a first step, in Q1 2015, the government provided tax breaks to industries that create jobs or export a minimum of 30% of their production, and reinvest profits in the country. 


To read the full article, go here

Member's Corner 

Leopard Capital comments from CEO Douglas Clayton


The Asian Development Bank has maintained its Cambodia GDP growth projection of 7.0% in 2014, rising to 7.3% in 2015. This projects a slight dip from 2013’s 7.2%, attributed to political and labor tensions earlier in the year. 2015’s anticipated growth acceleration is based on improving political stability amidst sound macroeconomic management and increasing foreign direct investment.  The recent fall in oil prices may further accelerate growth, as Cambodia is reliant on fuel imports.


To read the full article, go here.






ASEAN PEVCA has hosted or partnered many events in 1H2015, some including:

  • PEI Alternative Investment Forum for Family offices and Private Investors as chair, exploring the latest trends in alternative investments.

  • SuperInvestor Asia where opportunities and challenges of investing in the region were discussed.

  • ABC (ASEAN Business Club) Forum 2015: Part of the Infrastructure dialogue where discussion centered around challenges and potential solutions to solving the infrastructure deficit in the region, primarily in the are of funding.

  • Judging panel for competitions like VCIC in the region as well as entrepreneur feedback at ABC Forum as they progress in their young businesses


In addition, there have been webinars over the last six months on a variety of topics, including new tech age topics, Real Estate in India & SE Asia, as well as inputs for start ups. We have also hosted and participated in a number of closed door roundtables around specific topics of interest to those members/participants.


We will be chairing the SE Asia Summit for SuperReturns Asia in September 2015. Be sure to attend to hear our latest insights. You can register at



ASEAN PEVCA offers opportunities to investors at all levels that are already investing or have an interest to be part of the ASEAN story. The association provides a host of services from connecting members to new business opportunities, to new investors, as well as educational, consulting and advisory for research and insights into the ASEAN markets. Membership forms are available at!membership-benefits The association is expanding its presence in its member countries and across sectors. If you would like to get involved, or even lead any of the verticals that are still open, contact us at info@aseanpevca.comThe association provides service providers and other associated businesses a host of opportunities from branding, thought leadership as well as partnership opportunities in advisory, research and consulting assignments. To partner with the association, contact us at