PEI Awards 2017: The Asia-Pacific winners

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Large-cap firm of the year in Asia

1. KKR            
2. Baring Private Equity Asia
3. Affinity Equity Partners

A second large-cap title in a row for KKR, whose expertise in the region continues to be highly prized by LPs. It’s easy to see why –  KKR amassed $9.3 billion in June against a $7 billion target for its third pan-Asia fund, the largest ever in the region’s 20-year private equity history. That fund will focus on cross-border deals, corporate carve-outs and the Asian consumer story. Highlights of the year also included 13 new investments across Japan, Australia, South-East Asia and India. In Japan alone, the private equity powerhouse sealed nearly $6 billion worth of deals, betting big on the deal-making potential of the country. All this, and an eighth office in Asia too: the firm opened its Shanghai office in August, as it seeks to partner with more Chinese companies in their regional expansion.

Mid-market firm of the year in Asia

1. Everstone Group 
2. Navis Capital Partners
3. Kedaara Capital

For the second time in a row, Everstone has come out on top among mid-market firms in Asia. With $4 billion of assets under management and teams in India, Singapore, London and Mauritius, the firm is one of the largest investment houses in the region. It’s also one of the top restaurateurs in India and South-East Asia, as it continues to extend the reach of portfolio companies Burger King in India and Indonesia and Domino’s Pizza. In 2017, Everstone, founded by Atul Kapur and Sameer Sain (pictured) in 2006, made investments in two healthcare and wellness companies, and delivered four successful exits to its LPs. During the year, it also raised about $70 million for DSG Consumer Partners, a consumer-focused platform, which will back early-stage ventures in India and South-East Asia.

Limited partner of the year in Asia

1. China Investment Corporation
2. Japan Post Bank
3. Government Pension Investment Fund

At a time when many Chinese investors are facing scrutiny on overseas investments, China Investment Corporation continues to take a different path. The year’s top investor in Asia has been vocal about ramping up its direct investments in the US, especially in advanced manufacturing, technology healthcare and infrastructure, in a bid to diversify its portfolio amid low returns in public markets.

Currently, CIC allocates approximately 40 percent of its $813 billion of assets to overseas investments. In line with this, CIC teamed up with Goldman Sachs in November to raise a $5 billion private equity fund for US companies to tap the Chinese market. The sovereign wealth fund is all about “diversifying and not putting all its eggs in one basket”, CIC chairman Tu Guangshao said in Hong Kong in January.

Deal of the year in Asia

1. Bain Capital and others for Toshiba Memory Corporation
2. KKR for Calsonic Kansei
3. Queensland Investment Corporation, Pagoda Investment, Goldman Sachs, PIA for Icon Cancer Care

The Bain Capital-led consortium’s $18 billion investment in Toshiba’s prized memory chip business was Japan’s largest private equity deal in a decade, which was finally sealed in September after being delayed by lawsuits and government opposition. Bain was joined in the deal by Apple, Dell Technologies Capital, Kingston Technology and Seagate, the firm said when the deal was formally sealed. The deal felt like the crest of a Japanese mega buyout wave. By the end of September, private equity deal volume in Japan has reached an all-time high of $23.9 billion, according to consulting firm Bain & Company, 2.5x the previous year’s total. Bain’s win – which saw it edge out a competing KKR-led consortium – will be viewed as a watershed moment for Japanese private equity.

Exit of the year in Asia

1. PAG for Universal Studios Japan
2. Warburg Pincus for Vincom Retail
3. LeapFrog Investments for Mahindra Insurance

In one of this year’s tightest races, Asian stalwart PAG pipped global rival Warburg Pincus and emerging markets specialist LeapFrog to take top honours for its exit from Universal Studios Japan. PAG first invested in the Japanese theme park in 2013, when the firm took a $250 million stake in the business alongside existing investors including majority owner Goldman Sachs, according to media reports at the time. After a successful run at the park driven in part by the opening of its Harry Potter-themed attraction, PAG completed the sale of Universal Studios Japan in February 2017 to Comcast NBC Universal, giving Comcast total ownership of USJ and valuing the theme park operator at $7.5 billion.

Fundraise of the year in Asia 

1. KKR
2. Affinity Equity Partners
3. Asia Alternatives

When it comes to selecting the standout fundraises of the year, size matters to voters in the PEI awards. When KKR closed KKR Asian Fund III in June on $9.3 billion it broke its own record for the largest private equity fund dedicated to the region, surpassing its $6 billion Asian Fund II. The latest Asian fund, which received strong support from its existing investors including Washington State Investment Board and New York State Common Retirement, will focus on cross-border deals, corporate carve-outs – particularly in Japan – and the Asian consumer story.  In keeping with KKR’s other recent funds, the firm and its staff accounted for a sizeable chunk of the fund – around 9 percent of the total.

Secondaries firm of the year in Asia

1. TR Capital
2. HarbourVest Partners
3. NewQuest Capital Partners

The Asian secondaries market has come a long way in recent years and last year accounted for around 8 percent of global deal volume by seller base, according to Evercore. Hong Kong-based TR Capital is one of the few secondaries firms making waves in this area. Highlights from last year include closing its third fund on $200 million and closing five deals, including its first Vietnamese LP stake acquisition and two Indian fund restructurings which are understood to have closed.

“As Asian investors become increasingly sophisticated, secondary investment is no longer a niche option,” said partner Frederic Azemard.

This is TR Capital’s second win in this category in a row – surely a sign we’ll be hearing more about the direct secondaries specialist in years to come.

Secondaries deal of the year in Asia

1. Lexington Partners and Lazard for Warburg Pincus
2. Temasek and Greenhill Cogent for British Columbia Investment Management Corporation
3. Canada Pension Plan Investment Board and Lazard for Olympus Capital Asia

Competition for Asian secondaries deal of the year in 2017 was fiercer than ever and it’s arguable the three deals in contention all deserve honourable mention. There can be only one winner, and this year secondaries giant Lexington Partners along with advisory firm Lazard took top place. “A really cool deal,” was how one market source described this innovative transaction. Warburg Pincus sold a roughly $1.2 billion strip of its Asian portfolio, made up of stakes in 29 Asian companies, into a new vehicle with new terms.

Lexington was the majority buyer, and Goldman Sachs Asset Management, along with a few other parties, also joined in.

The deal was significant because it involved a large, brand name primary manager tapping the secondaries market to help with its portfolio management – a sign secondaries are becoming more mainstream.

Secondaries advisor of the year in Asia

1. Lazard
2. Greenhill Cogent
3. Atlantic-Pacific Capital

Leading the charge in the region last year was Lazard, which executed at least two headline-grabbing deals, one of which was voted by PEI readers as Secondaries Deal of the Year in Asia. The firm advised on around $2 billion in net asset value of Asia-focused secondaries deals last year, accounting for around 40 percent of regional volume.

“The legitimisation and growth of GP-led liquidity solutions was a key theme in 2017, and Lazard expects volumes in Asia-Pacific to grow in both GP-led solutions and LP portfolio sales in 2018,” said Nick Miles, regional head of Lazard’s private fund advisory group for Asia-Pacific.

Lazard’s work with buyout giant Warburg Pincus on the sale of a strip of assets from its Asian portfolio worth around $1.2 billion grabbed headlines for its innovation, size and brand name GP. Expect Lazard to further open up the Asian secondaries market this year.

Firm of the year in Australasia

1. Pacific Equity Partners
2. Quadrant Private Equity
3. Archer Capital

Perhaps not surprising, given its longstanding name in Australian private equity, Pacific Equity Partners retains its crown as the king of Australasia for the fourth year in a row, marking its eighth win in the category. PEP continued to invest its fifth fund, an A$2.1 billion ($1.6 billion; €1.4 billion) vehicle that closed on its hard-cap in September 2015 and added two investments to its portfolio this year.

The first involves a complementary business to portfolio company Pinnacle Bakery. PEP acquired all of the shares of bakery goods manufacturer Allied Mills for A$190 million. And with its second deal, it teamed up with The Carlyle Group in a 50/50 partnership for pharmaceutical company iNova, for $930 million in cash. 2017 also saw the firm bolster its team with new hires and promotions.

Firm of the year in China

1. CITIC Capital Partners
2. CMC Capital Partners
3. PAG

CITIC Capital Partners took the China award from last year’s winner PAG. 2017 saw CITIC Capital raise $1.57 billion for the US dollar-denominated tranche of CITIC Capital China Partners III. The Hong Kong-based buyout house also scored seven notable investments brought about by its resources and deep network in China. Key investments were centred on its China cross-border strategy, a first for its third China buyout fund, including German automotive and component supply provider Formel D, Ansell’s sexual wellness business, APAC healthcare solutions company Fullerton Health and McDonald’s 20-year franchise in China and Hong Kong.

Expect CITIC’s investments to make it big not just overseas but also in their home markets. Since completing its acquisition of McDonald’s in August, the firm has already forged partnerships with Chinese strategics, to expand the burger chain’s footprint in China, especially in the lower-tier cities.

Firm of the year in Japan

1. NSSK
2. Advantage Partners
3. J-STAR

In a closely fought race, NSSK came out just ahead of a very strong mid-market field. NSSK closed its second flagship fund on ¥60 billion ($532 million; €453 million) in September, exceeding the $500 million target it had set when it began pitching NSSK II to investors in the summer of 2016. Unlike its predecessor which received commitments solely from Japanese LPs, NSSK II was backed by global institutional investors from North America, Europe and Asia such as public pension funds, endowments, funds of funds, and financial institutions, according to founder Jun Tsusaka (pictured).

In addition to knocking out a successful fundraise, the firm scored three deals – publishing group Bunkasha, transport business Kantoku Global and elderly care business SCH.

Firm of the year in Korea

1. Affinity Equity Partners
2. MBK Partners
3. Hahn & Company

Another year, another win for Affinity Equity Partners. The Hong Kong-headquartered firm’s story in Korea highlights its strength in buying from chaebols (family owned conglomerates) and in securing proprietary deals, in an otherwise challenging market to do so.

In February Affinity teamed up with two LP co-investors, GIC and AlpInvest Partners, as well as Hyundai Commercial to acquire General Electric’s 43 percent stake in South Korean credit card business Hyundai Card. Five months later it bought a 64 percent stake in listed plastic storage company Lock & Lock for over $560 million. Building on its platform investing strategy, Affinity also secured the master franchise rights for Burger King Japan, working off its operating platform and management expertise of portfolio company Burger King Korea. Capping the year, Affinity sold half of its shares in Loen Entertainment to mobile operator Kakao, in a deal that saw a more than 50 percent jump in share price at exit.

Firm of the year in India

1. Everstone Group
2. Kedaara Capital
3. ChrysCapital

For the seventh year running, Everstone takes home the award for India. Building on strong economic fundamentals and fast-growing consumer themes across India and South-East Asia, Everstone backed two healthcare and wellness focused companies, OmniActive Health Technologies and Chemopharm, in 2017. It also re-launched 50-year old bakery brand Modern Bakery in India with a new brand entity as well as enhanced and healthier products. The manager achieved liquidity for its LPs through a row of four successful partial and full exits for 20 percent of the invested capital of Everstone Capital II, its second private equity fund that closed on $730 million in 2015.

Firm of the year in South-East Asia

1. KKR
2. Navis Capital Partners
3. Mekong Capital

Perhaps not surprisingly, given its victory in the large-cap and fundraise of the year in Asia categories, KKR retains its crown as king of South-East Asia for the second year in a row.

In a year where private equity-backed deals in the region slowed down, KKR powered ahead on the deal-making front with significant acquisitions in Indonesia and Vietnam.

The firm acquired a minority stake in Indonesian mass-market bread company Sari Roti and invested another $250 million in Vietnam’s largest diversified corporation Masan Group and its branded meat platform Masan Nutri-Science.

What’s more, KKR backed the series E round of Indonesian moto-hailing company GO-JEK.

Long admired for its activities elsewhere in Asia, KKR is now very much a South-East Asian powerhouse too.

Fund of funds manager of the year in Asia

1. Asia Alternatives
2. HarbourVest Partners
3. Axiom Asia Private Capital

A first victory in this category for Asia Alternatives, following one of its quickest fundraises for Fund V, which saw first close to final close in just three months. The San Francisco-headquartered fund of funds manager amassed $1.8 billion for its fifth pan-Asia fund and separate pockets, with about 85 percent of commitments coming from the firm’s existing investors.

Founder and managing director of Asia Alternatives Rebecca Xu called the fund “a milestone for the company”, reflecting on the $515 million it raised for its debut fund in 2007.

Xu added that while the majority of its capital raised of our capital came from North American LPs, the firm also attracted new commitments from LPs in Latin America, Europe and Asia.

Placement agent of the year in Asia

1. Eaton Partners
2. Campbell Lutyens
3. MVision

With LPs scrutinising commitments like never before, closing five funds in Asia with aggregate capital of over $3.6 billion – all of which hit the hard-cap or were oversubscribed in less than a year –  is no mean feat. Eaton has been pivotal in getting the fundraises done but what’s important to highlight is the range and diversity of its investment funds – from early stage through buyouts, to country-specific sector specialists, to pan-Asia. Chris Lerner, global partner and head of Asia for Eaton, calls 2017 the firm’s “best year in Asia in which the firm focused on a limited number of high conviction ideas”.

The Connecticut-based firm also celebrated its first decade in Asia in 2017, having raised over $10 billion for clients in the region since 2007 – a worthy winner for our placement agent of the year category.

Law firm of the year in Asia (fund formation)

1. Weil, Gotshal & Manges
2. Cleary Gottlieb Steen & Hamilton
3. Shearman & Sterling

PEI is delighted to welcome Weil, Gotshal & Manges to its awards with its debut win, clinching the top spot in this competitive category. In the past 12 months the firm advised on close to 10 funds including CLSA Capital Partners’ $400 million Japan mid-cap buyout vehicle, CMC Capital’s $600 million China buyout fund and CITIC Capital’s third Japan fund and third China fund which between them raised more than $1.8 billion. The group’s expertise is deep and wide, acting as fund counsel across asset classes spanning private equity, real estate, special situations, credit opportunity and infrastructure. And to top it off, Weil also has expertise advising on co-investments as well as carried interest plans and management platforms. With Asia the next private equity hotspot, expect to find the team – including Hong Kong-based partners John Fadley (pictured) and Albert Cho – at  Weil behind many of the headline funds over the coming year.

Law firm of the year in Asia (transactions)

1. Clifford Chance
2. Morrison & Foerster
3. Weil, Gotshal & Manges

Clifford Chance is taking home the gong for transactions law firm of the year for the seventh year in a row thanks to its involvement in a slew of the region’s most high-profile deals. Its Asia team – based out of offices in Beijing, Hong Kong, Seoul, Shanghai, Singapore, Sydney and Tokyo – worked with the Canada Pension Plan Investment Board on its acquisition together with KKR of a stake in India’s Bharti Infratel, a telecom tower infrastructures provider, with Navis Capital on the merger of the Celebrity Fitness chain of gyms with Fitness First, with CVC on the $330 million sale of its stake in the content solutions business of SPi Global, and with Actis on its acquisition of a majority stake in China-based textile company Zheijiang RGB Textile Group, to name a few.

Law firm of the year in Asia (secondaries)

1. Kirkland & Ellis
2. Debevoise & Plimpton
3. Simpson Thacher & Bartlett

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Game-changer

Kirkland & Ellis has done a clean sweep of the secondaries categories, picking up the award for best in North America, best in Europe and best in Asia, for the second year in a row. The firm worked on one of the most interesting deals to take place in 2017, the $1.2 billion sale of a strip of Asian assets from Warburg Pincus XI, an $11.2 billion, 2012-vintage buyout fund. The deal, which involved the sale of 29 separate stakes, many of which were in venture capital funds, was backed by a group of investors led by Goldman Sachs and Lexington Partners. As well as being one of the largest secondaries transactions to take place last year, the structure highlighted the growing range of possibilities that the market can offer.