This edition looks at the GP-led transaction where East Ventures’s LPs cash out; and Ares Management’s potential merger with Northstar Group.
Coller Capital becomes latest liquidity provider for Indonesian VC
Secondary specialist Coller Capital has offered liquidity to East Ventures’s LPs in its 2017-vintage, Indonesia-focused $27.5 million venture capital fund.
The continuation fund has all the remaining “good assets” in East’s fifth fund in a preferred structure without a discount upfront. The transaction generated 2x DPI for East Ventures’ LPs, a return deemed “a good outcome” for some investors in the current exit environment.
Accepting a 2x DPI in other scenarios could mean LPs cashing out are forgoing the potential for alpha generation and higher returns that the startups could create down the line to at least get their money back. However, LPs in East’s fifth fund in this transaction will continue to participate in the portfolios’ future growth and retain a share of profits.
East announced this week that stakes in Indonesian media startup IDN Media (26.91%), which owns news platform IDN Times, and logistics service provider Waresix (12.71%), are among the assets that are now held in the new fund, according to the latest information on DealStreetAsia – DATA VANTAGE. IDN Media was valued at $319 million in its latest funding round, while Waresix was valued at $423 million.
Still, transactions such as this are likely to be rare, owing to the lack of a proven track record among fund managers and varying asset quality in Southeast Asia.
“The general appetite for continuation funds from investors is limited to developed countries in Asia, which might be difficult for emerging markets to see GP-led deals,” Ardian’s head of Singapore and Korea & senior managing director Won Ha told DealStreetAsia.
“We’d likely want to be looking at markets like India, Australia, or the pan-regional markets that have gone through more cycles than many of the GPs in Southeast Asia have experienced,” said Dominic Goh, Managing Director, HarbourVest Partners.
Global secondaries players with multi-billion dollar funds could also be constrained to underwrite big-ticket deals for a region known for smaller transactions compared to the US. Putting together a multi-asset continuation fund housing minority stakes in different companies can be a challenging task.
Ares in race to scale up Asia exposure
Ares Management’s potential purchase of Northstar Group would be its fourth acquisition of Asia-based fund managers, and give the Los Angeles-based firm over $2.6 billion of underlying AUM that is largely invested in buyout assets in Southeast Asia.
Through GP acquisitions in the region, Ares has expanded its offerings over the years, adding strategies for pan-Asia special situations (now $12 billion in AUM), Asia private equity ($3.8 in AUM), and, most recently, real assets in Japan ($20 billion in AUM) and Brazil.
SSG Capital’s founder Edwin Wong, who went on to become Ares’s head of Asia, was one of the decision-makers in the discussions with Northstar, sources told DealStreetAsia.
Acquisitions such as these could help asset managers fast-track their ambitions to become one-stop shops and provide LPs with exposure to diverse strategies, particularly in regions where they lack local expertise and network access. Asia remains a key target for acquisitions as global private investors remain under-allocated in many emerging markets.
Top PE updates from APAC
PAG bucks trend with $3b in exits
Hong Kong-headquartered PAG put $2.8 billion in capital to work and delivered over $3 billion in liquidity to its limited partners last year, during what was labelled as one of the sector’s most challenging years. PAG was able to return more than three times as much in distributions to its LPs than it has over the last couple of years, PAG partner and co-head of PE Lincoln Pan told DealStreetAsia.
All eyes on Japan, India for DPI
Some of the top LPs in the Asia Pacific are looking for funds with a Japan or India focus to drive returns, as global capital shifts away from Chinese investments. Furthermore, China-focused funds have also been doing deals outside of their home ground.
Investors at the recent HKVCA Forum highlighted Japan’s PE market for its steady returns thanks to low corporate valuations, the presence of high-quality, large-scale businesses, and family-owned companies with a lack of successors.
“Everybody knows that DPI is a duty now. When you look at the Japanese market, it’s a great market to get cash back,” said Akihiko Yasuda, managing director and head of the Hong Kong Office at Asia Alternatives during a panel discussion.
With its thriving tech sector and demographic advantage, India is an attractive emerging market story for investors.
Nevertheless, there is caution around how well these markets will be able to absorb the influx of global capital as investors will still prefer larger-sized vehicles with experienced fund managers, which could limit the opportunity set.
Deals Corner
CVC has acquired 49% in the parent company of the Korean colour contact lens brand OLENS, which was valued at around $418 million.
MBK Partners and Young Poong intend to hold Korea Zinc accountable for hosting invalid shareholders’ meetings on Thursday in its months-long battle to take over the world’s biggest zinc manufacturer.
India’s Kedaara Capital is investing $350 million in software company Impetus Technologies.
Axiata has confirmed that it is now looking to sell stakes in Link Net after the sale process for its fibre assets attracted the likes of I Squared Capital.
IPO buzz
Shanghai-listed Loyal Valley Capital-backed Mabwell Biotech, a Chinese drug developer, is looking to do a secondary listing in Hong Kong. Others on the list are Rongxi Venture-backed Biokin Pharmaceutical and Ab&b Bio-Tech, backed by VC firms Chengshu Capital and Green Pine Capital.
High-end tea brand Bama Tea, backed by the likes of IDG Capital, also filed for a listing late last week.
People moves
Northstar’s Singapore-based managing director Sreejan Chaudary and Jakarta-based managing director Melvin Hade are set to leave amid transformative changes at the firm.
Coller hired ex-Partners Group executive Peter Wu as head of product management for private wealth and the first member of its newly-opened Singapore office, its fifth APAC location.
Fundraising
Gaw Capital has registered Gaw Credit Fund I and Gaw Infrastructure Partners Fund I with Singapore’s financial regulator, doubling down on two of the hottest sectors in private capital investing. It closed its seventh flagship fund for APAC real estate at $3 billion in 2023 with an enhanced focus on private credit.
Regulatory approval
Singapore’s competition regulator is looking for public feedback on the proposed privatisation of TalkMed Group, which operates Parkway Cancer Centre in Singapore. SGX-listed TalkMed received the take-private offer from Templewater-backed Tamarind Health.
Temasek-backed 65 Equity Partners will support the transaction by subscribing to an 18.3% voting interest in Tamarind Health.
Earnings
EQT is expected to hit the first close of its ninth flagship Asia fund in the second half of 2025. The fund could reach its $12.5 billion target and start the deployment at the time, per its earnings statement.
What to look out for
Blackstone is slated to have its next earnings call over the Chinese New Year holidays in many Asian countries on 30 January.
