Singapore-based private equity (PE) and venture capital (VC) fund managers deployed more than $9 billion, while VC investments exceeded $1 billion, with Singapore continuing to be a major investment hub. Singapore-based fund managers accounted for more than 55 per cent of total PE and VC investments into Southeast Asia. Meanwhile, Singapore-based companies received more than $2.7 billion in PE/VC funding.
This was revealed during the 2015 AGM of the Singapore Venture Capital and Private Equity Association (SVCA) on 28 April, which saw SVCA and Preqin – a PE intelligence firm – release a joint report on the landscape of the private equity sector; SVCA executive committee was also elected for the 2015-2017 period. The AGM saw Dr Jeffrey Chi retain his chairmanship, with Gary Ng of CLSA Capital Partners assuming the role of vice-chairman.
2014 saw 25 ASEAN-focused PE funds securing a total of $13.4 billion, with the number of vehicles closed each year, declining since 2012; but with mean fund sizes increasing to a record $609 million.
Three specific vehicles drove up the mean: Affinity Asia Pacific Fund IV at $3.8 billion, CVC Capital Partners Asia Pacific IV at $3.5 billion and Navis Asia Fund VII at $1.5 billion.
Singapore’s stable legal structure, pro-business tax environment and government incentives for technology startups continued to be attractive for the establishment of both early stage enterprises and venture capital funds.
Appetite for investment opportunities in ASEAN is substantial and growing, with an emphasis on venture capital and growth funds, alongside increasing deal activity. Aggregate deal value reached $9.3 billion for private equity-backed buyout deals and $1 billion for venture deals in 2014. The total number of new funds raised with Asia- focused themes, including country-focused and pan-Asian funds, also increased.
Fund Sizes & Venture Capital
However for country-focused and pan-Asian funds, sizes were smaller at around $300 million, with assets under management (AUM) of private equity and venture capital fund managers in Singapore standing at $28.3 billion. Singapore-based fund managers also focused on generating returns, with total private equity and venture capital investments more than tripling, exceeding the $9 billion mark.
Some PE investment highlights in 2014 were the $1.4 billion buyout of SGX-listed Goodpack by KKR and Blackstone’s $800 million investment in Tamarind Energy. Venture capital investments by Singapore-based fund managers also increased, exceeding $400 million and achieving the largest percentage growth among ASEAN countries.
Total private equity and venture capital investments in Southeast Asia saw a year-on-year (YOY) increase, with dealflow in early stave venture capital deals increasing significantly. The rising middle class in markets like Indonesia, the Philippines and Vietnam, with the potentially large market for internet and mobile products and services propelling and more than doubling investments in early stage Indonesian technology companies.
Singapore-based target companies still took the majority of venture capital investments, estimated to be $2.7 billion. Venture capital investments in Singapore companies were augmented by foreign capital co-investing with local funds. For instance, GrabTaxi’s Series C & D investments saw major venture investments by Softbank, Hillhouse Capital and GGVC.
Commenting on the state of PE investments in ASEAN, Ravi Thakran, the managing partner of L Capital Asia, commented “ASEAN as a whole is very promising. Not all of the countries and their economies are fully developed, thus providing ample opportunities for further growth and expansion. The various governments have noted the slowdown in China’s growth rates and increased cost structures, and thus they are leveraging on this by introducing suitable measures to attract more investments into their country.”
Thakran concluded “With lower costs in various ASEAN countries, investors will consider these attractive alternatives and thus help ASEAN develop and progress even further. In turn, the economies will improve and we will enjoy higher purchasing power, leading to increased private consumption.”
The Preqin report is available here.
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