New dawn or false dawn?

It's certainly not what you'd call concrete evidence of a lasting upturn in fortunes. Indeed, it may turn out to be nothing more than a statistical blip. But, whisper it quietly, the first green shoots of a possible revival in the Asian private equity market may have been seen in the first quarter of this year.

While the number of private equity deals across the region continued to fall, the total value of these deals increased from $3.1 billion in the fourth quarter of 2008 to $4.3 billion in the first quarter of 2009 (see chart below). According to data provider Zephyr, the first three months of 2009 brought “rejuvenation in the value of debt-backed deals”.

In line with the experience of other private equity markets around the world, including those in the US and Western Europe, most of the evidence still points to deterioration rather than revival. Between the first quarter of last year and the first quarter of this year, the number of deals tumbled from 164 to 68. And while the total value has shown an increase over the last two quarters, it is still less than half the $9.2 billion of deals completed in the Q1 period a year ago.

However, signs that the supply of debt is strengthening are not to be taken lightly. And, whether or not a revival is underway, the data has at the very least guaranteed that this year's second-quarter figures will be awaited with a heightened sense of anticipation.

MERRILL PULLS DOWN SHUTTERS IN TOKYO
Merrill Lynch Global Private Equity, the private equity arm of the investment banking group, has shut down its office in Japan. The firm's Tokyo office, which was set up in 2005, closed recently, a spokesman for the group confirmed. The office had two investment professionals: Terutomo Mitsumasu, managing director and regional head of the firm's operations, and Hidetoshi Shibata, also a managing director. According to a source close to the matter, both have left the firm. The firm has not closed a transaction in Japan since it began operations there, the source added.

VIETNAMESE FUND LISTS JEWELLER
VinaCapital, a Vietnam-based asset management and investment firm, has listed Phu Nhuan Jewellery on the Ho Chi Minh stock exchange. VinaCapital holds a stake of 11.7 percent in the company through the Vietnam Opportunity Fund, which is listed on the AIM. It has not exited any portion of its equity stake through the IPO, a company spokesman said. He added that the fund invested in Phu Nhuan in December 2007, but declined to comment on the amount invested.

FUND PIONEER HEADS TO ASIA
SJ Berwin, the pan-European law firm credited with inventing the private equity limited partnership, will open its first office outside Europe in Hong Kong, subject to regulatory requirements. “China and East Asia are huge and critical markets for the future” Jonathan Blake, senior partner, said in a statement. The China and East Asia practice will be founded by partners Daniel Liew, who is also the firm's Asia managing partner, Peter Tse and Hans Thomas Kessler. They will be joined by consultant Giovanna Kwong.

3I AND PRAX SELL LITTLE SHEEP STAKES
divested its 11.3 percent stake in Chinese restaurant chain Little Sheep. China-focused private equity firm Prax Capital has also divested its entire stake in the company, Jeff Yao, co-founder of Prax Capital, said. The two firms declined to provide financial details, but separately, US restaurant company Yum! Brands said that it will acquire a 20 percent interest in Little Sheep for approximately $63 million. In June 2006, 3i invested $20 million for a minority stake in Little Sheep, while Prax Capital co-invested $5 million.

CHURCH OPENS DOORS IN HONG KONG
The Church Pension Fund, which manages assets of about $8 billion, is opening an office in Hong Kong and has hired Eric Mason to oversee its Asian investments across all asset classes, according to reports. Mason was formerly head of The Carlyle Group's Asian leveraged finance business which was shut down in November 2008. Prior to that, he worked for 12 years at JPMorgan, most recently as regional head of leveraged and syndicated finance.

ROBECO TEAMS WITH TIANJIN GOVERNMENT
Robeco, a division of Dutch bank Rabobank, has entered into a private equity joint venture with TEDA International. TEDA is a subsidiary of Tianjin Investment Holding and manages all the financial assets of the Tianjin government. Robeco TEDA Investment Management Company will provide a platform for business development in China, focused on Tianjin, Robeco said in a statement. It will also launch the Robeco TEDA Sustainable Private Equity Fund, which will raise between $200 million and $500 million from Chinese institutional investors, a Robeco spokesman told Dow Jones.

TR CAPITAL CLOSES SECOND FUND
Hong Kong-based investment firm TR Capital has held a final close on an undisclosed sum for TR Capital, its second pan-Asian fund. Paris-based investment firm Tikehau Group and Paul Robine, TR Capital's founder, are sponsors of the fund, Robine said in an interview. The fund allocates 60 percent of its capital to private equity funds and the remaining 40 percent to direct private equity investments. It has made commitments to two private equity funds and intends to deploy more capital in the second half of 2009 and 2010.

EX TPG PARTNER TARGETS $400M FOR NEW FUND
Vivek Paul, formerly a partner at TPG Ventures' San Francisco office, has set up his own private equity firm, according to a source. Paul joined TPG in mid-2005 as a partner f rom Bangalor e -bas ed Wipro Technologies, where in his last role he was the president and chief executive officer. Paul quit TPG in late 2008. Akansa Capital, the new firm launched by Paul, is raising a fund targeting commitments of between $300 million and $400 million, unnamed sources told the Economic Times. A first close on the fund is expected by the end of the year, the report noted.

DEAL VALUE PLUMMETS IN NEW ZEALAND
New Zealand registered a total of 82 private equity investments last year worth NZ$178 million (€77 million; $103 million), down from NZ$1.22 billion in 2007. The total number of transactions, however, decreased by just three. In terms of the total value of private equity investments, 2008 was the country's worst year since 2003, when NZ$87.7 million was invested, according to a study released by the New Zealand Private Equity & Venture Capital Association and Ernst & Young.

FASHION DEAL FOR CARLYLE
Global private equity firm The Carlyle Group has invested $20 million for an undisclosed stake in Chinese women's fashion house Ellassay. Founded in 1995, Ellassay has more than 280 retail shops across China and has seen its revenues increase by 30 percent to 50 percent annually, according to a statement.

BANYAN COMPLETES DEAL DOUBLE FROM NEW FUND
Indian mezzanine provider BanyanTree Growth Capital has invested undisclosed sums in Trimax IT Infrastructure & Services, an IT product and service provider, and Kalpena Industries, a chemical compound manufacturer. The investments were made out of the BanyanTree Growth Capital Fund, the firm's maiden investment vehicle targeting commitments of $125 million. The firm has thus far raised $40 million from lead investors the Dutch development agency FMO and German development finance institution DEG, Naval Totla, a director at the firm, said in an interview.

RIVERSIDE BOLTS ON JAPANESE PARKING LOT FIRM
US-based mid-market investor Riverside Company has acquired MAOS, a Japanese parking lot operator, for an undisclosed amount. Founded in 1989, MAOS operates a network of parking lots in Tokyo with more than 5,000 spaces. The company also operates a vending machine placing business for use on their own lots as well as those of other operators. MAOS will be bolted on to Shinsouki, a Japanese parking lot operator Riverside acquired last February in its first Asian deal. Shinsouki operates more than 3,000 lots in Niigata.

ABRAAJ TO ACQUIRE PAKISTANI POWER COMPANY
UAE-headquartered Abraaj Capital has obtained the Pakistan government's approval for a controlling stake in Karachi Electric Supply, the sole power provider for the city's financial centre, through a $361 million investment. It is the firm's fourth deal in Pakistan, where last year it established a six-person investment team led by Farrukh Abbas.

CARLYLE EXITS CHINESE EDUCATION UNIT
Washington DC-based The Carlyle Group has sold Wall Street English, the Chinese subsidiary of English language school Wall Street Institute, to Pearson for $145 million in cash. The 37-year-old adult language school was purchased for an undisclosed amount in February 2005 by Carlyle Venture Capital II, a $600 million growth capital fund. Citi Private Equity co-invested in the deal. The company operates more than 400 centres in 28 countries.

3I'S ROWLANDS TO STEP DOWN
Chris Rowlands, chairman of 3i Asia, is to retire, according to a source close to the firm. Rowlands first joined 3i in 1984, though he left in 1996 and returned in 2002. He is a member of the firm's management committee and has worked on deals including DPhone, Joyon Southside and Foster and Partners. His departure will follow the appointment of Singapore-based Anil Ahuja as head of 3i Asia in January. Ahuja, formerly co-head of 3i Asia alongside Mark Thornton, was promoted to lead 3i's investment teams in Asia and work alongside the firm's local business heads in China, India and Singapore. 3i declined to comment.