Asia PE deals slump in 2013

Value and volume of PE deals in Asia were down year-on-year to August, although Southeast Asia had an increase in the value of its PE-backed transactions.

Private equity deals in Asia Pacific declined 19.7 percent year-on-year during the first seven months of 2013, to $12.2 billion from $15.2 billion, according to figures from data provider Thomson Reuters. 

Deal volume in the region also declined 30 percent to 218  during the same period. 

 Asia Pacific  Deal
  Change    Deal
Jan-Aug 2013    $12.2bn -20% 218 -30% 
Jan-Aug 2012   $15.2bn    311   

Excludes real estate transactions
Excludes Japan
Source: Thomson Reuters

Despite an overall decline, private equity firms invested 18 percent more in value terms in Southeast Asia during the first seven months of this year than during the same period last year. Up to August 2013, $30 billion was invested in the region, compared to just $25.4 billion the year before.

However, the number of transactions did decline to 546 from 663, suggesting fewer, but larger deals were completed in the sub-region. 

In particular, bucking the trend was Vietnam, which during the first half of 2013 attracted $535 million worth of private equity investment, a record first half amount that already exceeded the full year totals for the last four years, according to data from Private Equity International and Dealogic.  

To June 30, two out-sized deals in Vietnam accounted for the bulk of the investment: a $200 top-up investment in Masan Consumer from Kohlberg Kravis Roberts and a $200 million buyout of real estate group Vincom Retail by a Warburg Pincus-led group.

In expectation of deploying capital in Southeast Asia, some firms have increased their capabilities over the last 12 months. 
In October 2012, KKR opened its Singapore office to access opportunities in Southeast Asia. In July this year, the firm agreed to acquire a 9.5 percent stake in Jakarta-based Tiga Pilar Sejahtera Food for an undisclosed amount, just weeks after closing its second Asia Pacific fund on $6 billion – the largest amount ever raised in the region, PEI reported earlier.
Warburg Pincus, The Carlyle Group and The Riverside Company also joined others in the region by hiring or planning to add teams in Singapore, the firms said earlier. In May, Carlyle revealed it hired former investment banker Rajiv Louis as a managing director to lead the firm’s deal activity in Indonesia.

In addition, Affinity Equity Partners and TPG Capital are each raising $3.5 billion Asia-focused funds and will likely invest a portion in Southeast Asia.