Thursday, 17 July 2014
||Registration and refreshments
|| Welcome remarks
||Opening keynote address
Industry leaders panel: The Asian private equity proposition in 2014
The signs are promising for Asian private equity. The exit market has reopened and is providing LPs with good returns. This is translating back into a desire on their side to make new commitments to Asian funds. North Asia is generating the greatest interest for investment in the region, the scalability of Southeast Asia is still a compelling story, China is still viewed favourably and the contrarian would say now is the time to revisit India. However, given the rebound of Western economies and the patchy performance of some Asian funds, LPs are employing greater scrutiny when selecting a GP. In the current economic climate, the ability to generate alpha will be more important than ever to achieve superior private equity returns and justify the increased risk for LPs when investing in the region.
- Which markets and sectors are GPs and their investors most bullish about?
- Will currency depreciation and high valuations hurt the market, and is this likely to continue in the long term?
- Is an upswing in market conditions in Europe and the US causing LPs to lose their appetite for emerging markets?
- How will the rise of "shadow capital" controlled by big institutional investors affect the industry?
- Has the evolution of the private equity model to now include diversification into real assets, debt and mezzanine finance been accepted as an industry standard?
- What will the economic landscape look like in five years when the next crop of funds are looking to sell their portfolio companies?
||Networking coffee break
Finding the next wave of opportunity in Southeast Asia
Southeast Asia continues to be one of the most talked about investment regions globally. The theoretical attributes that excite investors-such as strong consumer demand and an increasingly affluent population-are present, but this has not transformed into a boom for private equity. There has been a steady flow of opportunistic deals but we are yet to see the obstacles of political and regulatory uncertainty and lack of transparency subside and make way for a large-scale investment arena that drills down to the individual country level.
- Where will the next hot spot be and does the associated enthusiasm drive up valuations and competition prematurely?
- Where does Singapore sit in its position as a hub for Asian private equity?
- Will political unrest continue to derail Thailand's aspirations for foreign investment, or is the risk worth taking?
- Are control deals a prerequisite for minimising risk and safeguarding your capital when investing in Southeast Asia?
- Will local connections and individual skill to spot and negotiate a favourable deal ultimately determine success and failure?
- How will the elections in Indonesia affect foreign investors and the private equity industry?
- Have increased bureaucracy and cost of labour in China resulted in an opportunity for manufacturing in Southeast Asia?
- How will the ASEAN Charter drive growth and intra-region trade?
Singapore and the mission to become Southeast Asia's Silicon Valley
Venture capital tech investments in Singapore last year totalled $1.71bn, outstripping those in Japan, South Korea and Hong Kong. International interest has included well-known US venture capital firms such as Andreessen Horowitz committing funds to local start-ups in Singapore. The government has seized on the local entrepreneurial spirit and has established numerous initiatives to co-invest in start-ups and encourage entrepreneurs and venture capitalists to set up shop and profit from the growing tech boom. So can Singapore become the hub for venture capital across Southeast Asia?
- How can the VC industry ensure that the injection of government funding is used correctly?
- What cluster groups exist and how mature is the start-up ecosystem when benchmarked globally?
- Which industries present the best opportunities for success for VC right now?
- Does Singapore have a strong talent pool, and can it attract the world-class tech professionals required for a sustainable tech industry?
- Can Singapore recreate the Silicon Valley start-up model and what role will the government play in becoming a tech hub?
Expert discussion: Asian private equity stories from fund managers in the trenches
The fundraising market has become increasingly competitive and intense in recent years as the number of active funds throughout Asia has skyrocketed. In this buyers market, LPs are in a stronger position to negotiate terms than in previous fundraising cycles, and as a result, the LP/GP dynamic is rapidly evolving.Fund managers operating in a region that often contrasts with their own culture and business methods have to be resourceful and adaptive when navigating the sometimes rewarding and often unpredictable markets of Asia. In this session, a group of successful fund managers will share anecdotes on the investments and deals that have provided the most challenges over the years and the invaluable lessons they have learned along the way through their professional journey in Asia.
Real assets across the globe
Real assets are playing an increasingly important role for investors thanks to a strong desire globally for improved infrastructure development and a fierce appetite for these types of investments from LPs. Although private sector funding is essential for many infrastructure and real estate projects, these investments are often perceived as high risk and are complicated by regulatory hurdles and lengthy project completion plans that don't necessarily fit into the private equity model. In spite of these factors, GPs are increasingly looking to enter the real assets space because of the need for large scale projects and the recognised potential for consistent returns.
- Which areas are most promising for private equity: energy, real estate, mining, transportation, clean tech?
- How can GPs partner with multilateral agencies in development projects?
- Greenfield versus brownfield: Where are the best investment opportunities?
- Are the lengthy project time tables associated with infrastructure development compatible with the private equity investment model?
- What are the most urgent infrastructure needs today, and how can private equity get involved in the development process?
- How can LPs best align their interests and strategies with GPs for this style of investing?
||Networking coffee break
Looking North: investing in Japan and South Korea
Japan and South Korea in 2014 are the countries where market sentiment is most bullish and headline-making deals are present. Japan's private equity market had a stellar year in 2013, with a large number of exits. Regulatory changes in Japan look likely to result in an increase in LPs' making allocations to private equity in the future whilst abenomics continues to promote business activity and provide opportunity. South Korea has proved to be one of the most consistent private equity markets in Asia over the past couple of years, with well-publicised mega buyout deals making the market attractive. Of course, there are always questions on currency, the ability to compete with domestic conglomerates for deals and acquisitions, and the traction that private equity funds can truly make in these markets.
- How has last year's positive exit market impacted deal flow and market sentiment?
- Will large cap deals increase and provide new opportunities in the market?
- How will the new regulations and mandates in South Korea and Japan affect private equity?
- Will LPs in North Asia increase their allocation to global private equity?
- Is there likely to be more opportunity to compete with the large companies of North Asia for deals, and are they likely to sell assets to private equity?
The audience sets the agenda: Pick the investment destinations you want to hear
Attendees will have a chance one month in advance to select the countries they want to have on the agenda in this session. When the votes have been counted, AVCJ will select three country experts to deliver a 10-minute pitch and field questions before each member of the audience votes on the pitch that would win their investment. There can be only three destinations in contention on the day, so cast your vote via e-mail and set the agenda.
Destinations: Cambodia, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam
||Close of conference day 1
Friday, 18 July 2014
||Registration and refreshments
This way to the exit: Selecting the best route to return capital
After a period of false starts, the exit market is back on track. The reopening of the IPO market has enabled GPs that have been playing the waiting game to cash out a long pipeline of past investments. There is also a greater acceptance of trade sales, as this was the principal exit route for private equity sellers in 2013 and GPs were compelled to seek industry connections and develop a new route for exit. However, the volume of companies looking to have an IPO and regulatory reforms calling for greater disclosure and transparency before a public offering is allowed mean for many it will be a bumpy ride.
- What exit strategies are GPs currently considering over the next 12 months?
- Should an exit review process be hard-wired into the portfolio management process?
- What effect will the Alibaba IPO have on the market and will this result in bumper returns for LPs as similar exits follow?
- How are the reforms announced by the China Securities Regulatory Commission affecting private equity firms looking to hold an IPO?
The awakening of the Chinese private equity market
Capital market reforms and the resumption of the IPO market mean the Chinese private equity market is experiencing an upturn in activity. A progressive VC industry and the creation of free trade zones are also adding to an improved market sentiment in 2014, but challenges are still present as deal quality and valuations remain an issue. Liquidity pressure is still prevalent despite the opening of the IPO market, as it is oversubscribed and quality of submissions is questionable.
- What key challenges does the industry face under the new IPO regulations?
- How could the Shanghai free-trade zone affect the private equity industry?
- How are new entrants into the market changing the investor landscape in China?
- Are valuations likely to come down and create a more favourable deal environment, or will competition keep them high?
- What is the future for the renminbi fund market?
- How is the macroeconomic situation impacting the Chinese private equity market?
||Networking coffee break
Will Southeast Asia provide fertile ground for buyout deals?
As global buyout firms deploy more resources in Asia-Pacific and intensify their focus on Southeast Asia, using Singapore as a hub, there is an expectation that rising prosperity, political stability and industrial consolidation will create opportunities for buyout deals. But are there enough mid- to large-size transactions to go around, and will they come at reasonable prices?
- How critical is it to form relationships with local partners and business leaders to source and win deals?
- Will a greater availability of leverage increase the potential for buyout deal flow?
- What markets are most likely to provide opportunities for buyout deals that are available to private equity?
- Will large-size deals in the region be hundred-million-dollar rather than multi-billion-dollar transactions?
The LPs' view: The Asian private equity proposition
The fundraising market in Asia has become increasingly competitive in recent years as LPs placing greater scrutiny on GPs' track records, seek increased flexibility for fees and terms, and look for collaborative investment opportunities. So what fund type, investment destinations and markets are LPs searching for when they seek investments in Asia and how have their Asian private equity portfolios performed thus far?
- How do LPs view Asia as an investment destination compared to the rest of the world?
- Do LPs prefer global, regional or country fund managers for accessing Asian markets?
- Is Southeast Asia only viable when viewed as one investment destination, or do LPs investigate specific countries in the region?
- Are control versus non-control deals a deal breaker or are LPs open to both investment styles?
- Do LPs in general view track record purely in terms of fund performance, or is the individual's record just as important?
- Have GPs' appetites to raise new funds exceeded LPs' ability to commit?
- How can a start-up fund attract commitments? Does it have to focus on a destination, structure or asset class to stand a chance?
- As GPs return capital and LPs' private equity portfolios shrink, is now the time for GPs to hit the road and start fundraising?
Close of conference