Capital Markets

► July 2018 recorded US$1.5 billion in deal value, at par with investments recorded in July 2017. In terms of deal volume, investment activity increased by 50% to 63 deals in July 2018, compared to 42 in July 2017.

► Breaking away from recent trends, July 2018 recorded fewer large size deals. There were three deals of value > US$100 million (cumulatively worth US$402 million) in July 2018, accounting for only 26% of total investments as against a 65% investment share in June 2018.

► July 2018 recorded US$1.5 billion in deal value, at par with investments recorded in July 2017. In terms of deal volume, investment activity increased by 50% to 63 deals in July 2018, compared to 42 in July 2017.

► Breaking away from recent trends, July 2018 recorded fewer large size deals. There were three deals of value > US$100 million (cumulatively worth US$402 million) in July 2018, accounting for only 26% of total investments as against a 65% investment share in June 2018.

► The fewer number of large deals in July is no indication of a trend, as there are many mega deals in the works, the most prominent being the recently announced US$4.2 billion acquisition of Arysta LifeScience, an agrochemicals company by UPL Limited. Press reports seem to indicate that UPL is looking to part-fund this acquisition by raising funds from large PE funds.

► TPG was the most active PE investor in July 2018 and announced four deals, including a US$105 million investment in Sai Life Sciences Limited for a 35% stake, US$40 million investment in e-commerce platform Livespace and co-investments with a group of other investors in online ticketing platform Bookmyshow and an NBFC, Five Star Business Finance Limited.

Forum’s Agenda:

Private equity (PE) deal value skyrocketed in 1Q18 as it marked the completion of one of the largest secondary transactions in the region thus far, Global Logistic Properties (GLP) for US$12b, along with the sale of Equis Energy for US$5b. Dry powder committed to Asia-Pacific continued its upward run, reaching a record level of US$313b by the end of 1Q18.

PE and venture capital (VC) investment value in 1Q18 increased manifold, with 19 deals being completed, valued at US$21.9b in comparison to 26 deals worth far lower at US$687m in 1Q17. Exit value too went up substantially from US$295m in 1Q17 to US$17.7b in 1Q18, mainly because the two largest buyouts completed in 1Q18 were secondary transactions. 

Private equity (PE) deal value skyrocketed in 1Q18 as it marked the completion of one of the largest secondary transactions in the region thus far, Global Logistic Properties (GLP) for US$12b, along with the sale of Equis Energy for US$5b. Dry powder committed to Asia-Pacific continued its upward run, reaching a record level of US$313b by the end of 1Q18.

PE and venture capital (VC) investment value in 1Q18 increased manifold, with 19 deals being completed, valued at US$21.9b in comparison to 26 deals worth far lower at US$687m in 1Q17. Exit value too went up substantially from US$295m in 1Q17 to US$17.7b in 1Q18, mainly because the two largest buyouts completed in 1Q18 were secondary transactions. 

The largest deal completed in 1Q18 was the secondary buyout of GLP by Hopu Investment Management, Nesta Investment Holdings, Hillhouse Capital Group, China Vanke Company, and Bank of China Group Investment along with the senior management executives of the firm at a staggering US$12b, which will go down as one of the major PE buyout deals completed in Asia to date. GLP is a global provider of logistics solution and is§focused on creating a logistics ecosystem that utilizes the latest technology, data and service offerings to drive value for customers. We expect to see a continued trend of future deals above US$1b driven by factors such as record levels of dry powder, a growing trend of co-investing and an increasingly active group of large direct investors

A lot has been written about the flow of funds (rather the lack of funds) in the real estate sector of India. However, an in-depth analysis of how this trend has changed in the last decade has not been detailed out many times. This report seeks to trace the course of capital flow and analyses key factors that brought forward different kinds of lenders at different stages of economic growth and reforms in India.

With many positives now backing the Indian PE / VC story, strong 1Q numbers and the deal momentum in play, we believe that PE / VC investment activity in 2018 may eclipse the record highs seen in 2017. The changes unleashed by the Insolvency and Bankruptcy Code (IBC) have opened India to a new PE asset class of stressed assets/distressed debt, adding more wind to the already fullsails of the Indian PE/VC story. The infrastructure asset class too is expected to see a lot of investment dollars, especially in the roads sector as the government looks to privatize arterial routes to fund their ambitious roads’ capex plans. Real estate is also projected to see good investment activity, especially commercial real estate as more “REITable” platforms get built.

Investment into real estate (legal considerations) in China, Indonesia, Malaysia and Vietnam.

PRIVATE REAL ESTATE CONTINUES TO DELIVER FOR INVESTORS

Investors surveyed in June for the Preqin Investor Outlook: Alternative Assets, H2 2017 reported high levels of satisfaction with private real estate returns. The majority (95%) of respondents reported that the performance of their private real estate portfolios had met or exceeded their expectations over the past 12 months, and 91% felt that they had met or succeeded over the past three years. It is clear that investors have a generally favourable view of the asset class, with 44% reporting a positive perception of real estate, compared with just 14% that have a negative perception.