So far this has been quite an eventful year. While we keep hearing about all the problems with valuations, Indonesian politics (haze notwithstanding!), and other such market issues, activity at the association is at an all time high. This includes new LPs looking for information on managers in the region, to new fund raises by existing as well as a handful of new GPs, new markets opening up to PE in the region, to strategic partnerships being sought for ASEAN companies from outside the region, and tremendous amount of deal flow from entrepreneurs/corporates looking for financial/strategic investors.
In addition, we have started to release pre-deal analytics which indicate the interest shifts of buyers across sector, which will unleash a whole set of predictive analytics. We are working with more DFIs willing to seed/invest in new funds And corporates are far more active on looking for interesting opportunities to expand their presence or abilities in their quest for tapping the growth opportunities in the region.
What we are witnessing, in terms of trends, is while there is a further shift in activity towards mid-market deals, there are opportunistic large deals to be had, more so in the infrastructure and similar services spaces. We are seeing fund creation activity picking up, for both regional as well as some local funds, of late the newest ones being Philippines country funds, along with a smattering of frontier market funds out of Myanmar & Cambodia. Managers feel declining valuations are now coming in line with where they should be and in some areas providing some attractive opportunities. We don't expect valuations to come down much further as dry powder is still over $30 billion and new fund raising is still taking place.
The volume of small deals is promising as it shows that we are in a growth market. Small businesses have ambitious plans and are raising capital to fund these plans. There have been a couple of hundred small deals recorded over the last two years, and it continues to grow which is a positive sign.
Besides our regular events, we are launching our debate series on December 14th, 2015. Watch out for more information on this event!
Heat Map for Singapore Technology Sector
ASEANPEVCA, Insight Alpha and Merger Alpha have teamed up to use data, algorithms and predictive analytics to help customers answer questions about “What’s Next?”.
• How can we predict the next investment trend?
• What sectors are hot?
• What’s the next big industry we should position ourselves in?
• What are our competitors up to and what is their likely next move?
In today’s market it is important to be able to predict trends in investing. One key area the ASEANPEVCA is actively working with our partners on is PREDICTIVE ANALYTICS. Painstakingly analyzing complex, hard to obtain data to predict when the bottom is falling out of a sector (investors are rapidly moving away) or moving into a sector in large numbers is one of the keys to successful investing Hope you enjoy our Private Equity Technology Heat Map in Singapore for Jan – June 2015.
Note that this is data on which sub sectors in technology buyers are pursuing and not that of completed transactions. The ASEAN PEVCA members see huge value in getting this pre-deal information. While we all agree that individual investments need to do well, knowing in advance what other investors are planning or looking at is a huge competitive advantage.
Vibrant ASEAN - Ten to Tango - A White Paper
Consumer aspirations as consideration for investment strategy – Divya Nagarajan
Asean Economic Region will soon be a reality. While there are debates around the progress of the adoption of the economic community blue print and the timelines around when it will be ready, whether in 2015 or beyond, there is a lot of optimism on the value that the integration will bring about. The foundational pillars on what it is set namely - Single Market and Production Base Competitive Economic Region, Equitable Economic development and Integration into the Global Economy will be the new paradigm of operating in Asean. The alluring promise of free flow of goods, services, investment, capital and skilled labour raises hopes and aspirations for the 600 million people in Asean countries – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore and Thailand. Connectivity will play a crucial role in mitigating certain aspects of structural complexity inherent with the different scale of the economies and in fueling consumer aspirations. While there are inherent differences in ASEAN, there are common threads that bind Asean – emerging millennials, sense of optimism, filial ties and urbanisation. Research shows that private equity firms usually pursue strategies that are largely based on financial engineering and others pursue strategies based on operational engineering  (Gompers, Kaplan & Mukharlyamov, 2015). There is not much known around the levers of value creation that PE firms use to create. Qualitative markers such as networked access, domain expertise, and operational management play an important role in distinguishing the best performing private equity firms from the rest. There is growing evidence of behavioural economics being established in the marketing and communication industry. The non-rational aspects of decision making are being accepted and acknowledged. Consumer aspirations underpin growth of different products and services, thus could be a valuable component of evaluating investment strategies beyond financial reengineering, and operational reengineering that PE firms undertake. This white paper postulates the need to embrace the soft fuzzy aspects of consumer aspirations that organisations deliver to in evaluating PE and venture capital strategy.
Gompers, P., Kaplan, S., & Mukharlyamov, (2015, April). Retrieved from http://www.hbs.edu/faculty/Publication%20Files/15-081_9baffe73-8ec2-404f-9d62-ee0d825ca5b5.pdf
Continue here for the full paper
ASEAN PEVCA continues to be actively hosting and supporting many events in 2H2015, some including:
Panelist at the 2nd ASEAN-Japan Public-Private Dialogue on New Industries to AEM-METI Meeting in July 2015
Chairing the South East Asia Summit for SuperReturns Asia in Sep 2015 where opportunities and challenges of investing in the region were discussed.
FT-BNP Future of Fund Management Dialogue in Oct 2015 discussing the future impact of technology & digital innovation on the asset management industry.
Speaker at SEA Private Equity Conference in Oct 2015 on LP Perspectives, exploring LPs from an instituional, FoF and Family office as well as impact investment perspective.
Presenting the case for PPP at the UNEP-SEA-NCCS Workshop in Oct 2015
Supporting association at the FT Asian Wealth Management Summit in Nov 2015
Participant at the WCD-Spencer Stuart roundtable in early Nov 2015 on "ASEAN on the Rise" and implications for businesses with AEC 2015 launch
ASEANPEVCA is delighted to be working with PEI on their 2nd Annual Family Office Forum which will take place on 18 November 2015 in Singapore. PEI will bring together over 100 of Asia’s most dynamic family offices for a full day discussion on alternative investments and private equity. Please visit the website for full details: https://www.privateequityinternational.com/familyofficesingapore or contact Helen Sanders, Project Director, Family Office Events, PEI on firstname.lastname@example.org
ASEANPEVCA is planning the launch of its debate series on investing in the ASEAN region on December 14th in partnership with DBS Bank. We will be posting more information as we get closer to the date.
In addition, there have been webinars over the last six months on a variety of topics, including fund raising, new tech age topics, corporate venturing and start ups environment. We have also hosted and participated in a number of closed door roundtables around specific topics of interest to those members/participants.
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 http://www.aseanpevca.org/#!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 email@example.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 firstname.lastname@example.org