The equities market rally in the US could be coming to an end if rising bond yields are any indicator.
Yet, the buoyant market, driven by easy monetary policy, has already attracted scores of companies eager to tap capital markets flush with liquidity.
There were nearly 500 IPOs that raised $174 billion last year – half of the listings were SPACs, or special purpose acquisition companies. That trend has accelerated in 2021, with no signs of slowing. There have already been 190 SPACs listed on US stock exchanges this year, with more to come.
In Southeast Asia, Indonesia’s MNC Vision Networks was reported this week to be looking to merge its video streaming business with Malacca Straits Acquisition, the blank-cheque vehicle led by Ark Pacific Capital Management’s Kenneth Ng.
Southeast Asia is a prime hunting ground for SPACs, given the crop of tech unicorns that are seeking public listings, as this list of potential targets shows.
In light of the SPAC frenzy, DealStreetAsia held a webinar on Friday where panellists expounded on the suitability of the SPAC as an alternative to IPOs for the tech companies that can demonstrate a clear path to profitability.
The panellists were Ravi Thakran of Aspirational Consumer Lifestyle Corp, Jun Hong Heng of Crescent Cove Advisors, and Helen Wong, partner at Qiming Venture Partners. The panellists noted that the current batch of sponsors and companies should put to rest the patchy reputation that has plagued SPACs.
Among the latest potential SPAC sponsors are Gaw Capital Advisors. The Hong Kong-based private equity group is said to be considering launching a SPAC to target technology companies in Asia.
Another avenue for investors keen on capitalising on tech IPOs are secondaries, particularly in late-stage, pre-IPO companies, according to investment platform Xen Capital.
Meanwhile, Warburg Pincus-backed real estate group ARA Asset Management is reportedly considering returning to the public markets in a $1 billion dual listing in Singapore and Hong Kong.
ARA was delisted from the Singapore Exchange in 2016, in a $1.3 billion leveraged buyout led by Warburg Pincus, in a consortium that included ARA’s founder John Lim, The Straits Trading Company, and Cheung Kong Property Holdings. Warburg Pincus is the largest shareholder in ARA, with a 48.7% stake.
Even as stock markets seem detached from economic reality, the impact of the pandemic has begun to bite.
BQ, the Spanish electronic devices maker majority-owned by a unit of Vietnam’s Vingroup, has filed for bankruptcy. VinTech acquired a 51% stake in BQ in December 2018 to boost its smartphone manufacturing capability.
Canadian pension fund OMERS reported an annual net loss, its first since the 2008 global financial crisis. The widespread pandemic-related restrictions had hit OMERS’ investments in real estate, energy, and financial services.
Despite pandemic doldrums, our latest report on private equity activity showed stronger-than-expected fundraising in 2020.
Four Southeast Asia-focused PE funds recorded final closes in 2020, raising a total of $1 billion. Three of the funds were closed in the second half of the year. In the previous year, five funds recorded final closes to raise a total of $1.3 billion.
This bodes well for funds being launched this year.
Malaysian pension fund EPF has launched a $600 million private equity fund.
It will be the world’s first Shariah-compliant PE fund and have both direct and co-investments managed by BlackRock, HarbourVest Partners, and Partners Group.
China’s Boyu Capital, which counts Temasek Holdings, GIC, The New York Common Retirement Fund, and Li Ka-Shing as investors, is reported to be raising as much as $6 billion for a new China-focused fund. It last raised $3.6 billion in 2019.
Boyu Capital, whose founders include Alvin Jiang, the grandson of former Chinese premier Jiang Zemin, was also reported to have relocated part of its operations to Singapore from Hong Kong.
Southeast Asia deals
Among the most significant announcements this past week was Singapore video-sharing service Lomotif selling an 80% controlling stake to a group of investors, including former MoviePass Chairman Ted Farnsworth, for $125 million.
Singapore sovereign wealth fund GIC is taking a stake in Indonesia’s Bank Jago. The digital banking player was last in the headlines after ride-hailing unicorn Gojek’s investment. GIC will invest $222 million in Bank Jago via a rights issue.
Meanwhile, Astra Ventura has invested an undisclosed sum in edtech startup Ngelesin. Astra Ventura, the VC arm of Indonesian conglomerate Astra Internasional, has also made multiple investments in transport tech and waste tech, according to president director Jefri Sirait. The VC has previously focused on offering financing to SMEs.
Also this past week, two social commerce firms have raised fresh funds.
Malaysian startup AVANA, which also has operations in Indonesia and is expanding to Taiwan, raised an initial part of its $15 million Series A target from existing investor Gobi Partners.
Singapore-based Raena closed a $9 million Series A round co-led by Alpha Wave Incubation and Alpha JWC Ventures.
Staying in Singapore, plant-based meat startup Next Gen raised a $10 million seed round from investors, including Temasek Holdings, K3 Ventures, and Switzerland’s Blue Horizon.
Singapore-based Jungle Ventures has topped up its investment in Saltmine, the digital workplace design platform that raised $20 million in a Series A round.
Meanwhile, Singapore-based restaurant reservation app Chope has raised $10.6 million in a Series E funding round from investors including Square Peg Capital and Singha Ventures. This comes more than three years after its last fundraising when the 10-year-old company secured $13.6 in a Series D round led by Square Peg.