Asian private equity investment levels have reached a record high, according to data published for 2003, despite the dual problems of SARS and war in Iraq.
The report, published by the Asian Venture Capital Journal, revealed that a total of $17.9 billion (€14.24 billion) was invested in 2003, compared with $10.45 billion in 2002, an increase of 91 percent. Japan was the leading market for investors with approximately $7.3 billion. South Korea placed second with $3.3 billion invested.
Other top destinations for private equity capital last year were Australia ($2.8 billion), China ($1.28 billion), India ($774 million) and Indonesia ($653 million).
The increase in activity came against a backdrop of economic uncertainty, particularly in the first half of the year, when the SARS epidemic brought a temporary halt to deal activity across the region.
Activity picked up in the second half of the year, which saw landmark deals such as the $2 billion buyout of Japan Telecom’s fixed line business by Ripplewood Holdings, and the acquisition of a minority stake in South Korea’s Hanaro Telecom by AIG and Newbridge Capital in a $500 million deal.
The report also highlights a pick-up in fundraising activity in 2003, which it says is likely to gather pace in 2004. Asian private equity firms raised a total of $3.32 billion in 2003, up eleven percent from the previous year’s total of $2.99 billion.
The increase was driven by Japan-focused buyout and restructuring funds, including Mizuho Capital, Basic Capital, JAFCO and Carlyle Japan. which this month announced a final close on $470 million. Other funds in the market in 2003 included HSBC Private Equity Asia’s $350 million first close of fund dedicated to Asia, and Merlion India Fund, which raised $260 million from co-sponsors Temasek Holdings in Singapore and Standard Chartered in Hong Kong.