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PEI Awards 2016: Asia-Pacific winners

LARGE-CAP FIRM OF THE YEAR IN ASIA
1. KKR
2. Baring Private Equity Asia
3. FountainVest Partners

In a closely fought race, KKR took the crown from Baring Private Equity Asia after a year of milestones for KKR in Asia. Not only did the firm reshuffle its investment teams in China, Korea and South-East Asia, it also readied the launch of its third pan-Asian fund, which, at $7 billion, would be the largest to be raised in the region.

KKR invested across the length and breadth of the continent via its $6 billion Asian Fund II – from Indonesian start-up GO-JEK to India’s second largest insurer SBI Life Insurance, and most recently with multi-billion dollar deals in Japan’s corporate carve-out space. 

Ming Lu, head of Asia private equity, says the firm is also eyeing cross-border M&A in Japan and China and companies that benefit from South-East Asia’s consumer growth.

KKR also claimed three other titles in Asia this year – Exit of the Year for Alliance Tire, Deal of the Year for GO-JEK and Firm of the Year in South-East Asia.

MID-MARKET FIRM OF THE YEAR IN ASIA
1. Everstone Group
2. Navis Capital Partners
3. Quadrant Private Equity

With 60 percent of the vote, Everstone beat two-time winner Navis to secure this award for the first time. The victory followed a year of back-to-back acquisitions. India-focused Everstone continued its deal spree this year via its $730 million vehicle Everstone Capital Partners III. It completed its first US acquisition in October of CRM solutions provider C3 through its Singapore-based arm Everise Services.

It also backed pharmaceutical company Rubicon Research, drug delivery company Ascent Health & Wellness, Hindustan Unilever’s bread and bakery business and nutrition supplement supplier OmniActive Health Technologies.

Everstone bolstered its senior leadership team with five new executives, including a former managing director at Advent International who will head the firm’s new stressed assets business. Along with hiring top talent, the firm also opened its sixth office in London.

LIMITED PARTNER OF THE YEAR IN ASIA
1. Nippon Life Insurance Company
2. National Pension Service of Korea
3. Cathay Life Insurance

It is no surprise that Nippon Life Insurance Company received almost a third of our readers’ votes in this category. At a time when LPs are taking a more cautious approach with their investments, Japan’s largest private life insurer by assets has been making significant moves into alternatives.

Nippon Life has allocated $4 billion of its ¥62.3 trillion ($508 billion; €473 billion) in assets to private equity. While 90 percent of the exposure is in the US, Western Europe and other developed markets, the Japanese insurer announced last year that it would invest up to ¥1 trillion in emerging markets, with Latin America a favoured region. 

Nippon Life is also ramping up investments in overseas companies. It acquired an 80 percent stake in the life insurance business of MLC Limited, a subsidiary of National Australia Bank, one of the largest Australian banks. This deal marks the insurer’s first majority stake in a major overseas company.

DEAL OF THE YEAR IN ASIA
1. KKR, Warburg Pincus, Farallon Capital and Capital Group Private Markets for GO-JEK
2. PAG Asia Capital for Golden Apple Education Group
3 Primavera Capital Group for Yum China

This year’s winning deal was the largest-ever investment in an Indonesian start-up. Betting on the world’s fourth largest population, KKR, Warburg Pincus, Farallon Capital and Capital Group Private Markets invested over $550 million in the latest round of financing of motorcycle hailing app GO-JEK, which provides moto-taxi, food delivery, lifestyle and courier services.

“With a rapidly expanding middle class, increasing urban density and a young demographic that is internet savvy, GO-JEK is well positioned to become the ‘go to’ platform for high frequency daily services including transport, food, logistics and payment,” Jeffrey Perlman, head of South-East Asia for Warburg Pincus said.

EXIT OF THE YEAR IN ASIA
1. KKR for Alliance Tire Group
2. Navis Capital Partners for Golden Foods Siam
3. The Carlyle Group for Meinian Onehealth

KKR last year struck one of the largest private equity exits in India when it sold its controlling stake in Netherlands-based Alliance Tire Group to Japan’s Yokohama Rubber Company for an enterprise value of $1.5 billion. That deal represented more than 12 times ATG’s operating profit in 2015.

Over three years, KKR took ATG – which has significant presence in India and Israel – to the next level through strategic initiatives in areas such as production, sales and distribution in the US, EU and India. Through these changes, which saw KKR Capstone dedicate 13,000 hours to ATG, the company’s output volume rose by 43 percent and production capacity climbed from 73,000 tonnes in 2013 to 170,000 tonnes in 2016. That lifted the company into the ranks of the top 10 global tyre producers. 

ATG tyres also featured in the movie Batman v Superman: The Dawn of Justice.

CO-INVESTMENT OF THE YEAR IN ASIA
1. Canada Pension Plan Investment Board, Temasek Holdings et alia for Postal Savings Bank of China
2. Korea Investment Corporation and CDC Capital International
3. HarbourVest Partners

It’s easy to see why this roster of high profile investors took the honours for co-investment of the year in Asia. The target – the state-owned Postal Savings Bank of China – is the largest in China with more than 400 million retail customers and 40,000 branches. The transaction was also ahead of its IPO on the Hong Kong Stock Exchange, which raised more than $7 billion in September.

CPPIB invested 3.2 billion yuan ($500 million; €458 million) alongside big-name investors including Temasek Holdings, JPMorgan, UBS Group, Alibaba affiliate Ant Financial and Tencent for a 17 percent stake in the company.
The Chinese state-owned bank hopes that these strategic relationships with investors will help to modernise its business with streamlined online payments and more loan products.

SECONDARIES FIRM OF THE YEAR IN ASIA
1. TR Capital
2. NewQuest Capital Partners
3. HarbourVest Partners

The Asian secondaries market may be dwarfed by its North American and European counterparts, but that doesn’t mean innovative deals aren’t happening there. In a region that is bursting with potential, it’s easy to see why readers chose TR Capital: the Hong Kong-based firm added three investment professionals, was understood to be nearing the final close on its third fund targeting $250 million towards the end of last year and opened a Shanghai office in June.

This is TR Capital’s first win in our awards, and its portfolio is diverse and impressive: in 2016 the firm added optoelectronic data communications manufacturer Source Photonics through a direct secondaries deal that provided an exit for limited partners in a fund managed by Francisco Partners. It also acquired a portfolio of six Indian companies from an innovation fund backed by Indian financial institutions.

In a region that is bursting with activity, TR Capital is definitely capitalising on its opportunities.

SECONDARIES DEAL OF THE YEAR IN ASIA
1. NewQuest Capital Partners for DFJ India portfolio
2. Committed Advisors and Eaton Partners for Asian restructuring
3. Park Hill for Temasek’s Astrea III securitisation

India is one market Asian secondaries professionals have been excited about for a while. Hong Kong-based NewQuest Capital Partners has been ramping up its focus on the subcontinent, typified by its purchase of venture and growth capital firm Draper Fisher Jurvetson’s India-focused portfolio.

The deal process began in the second half of 2015 and attracted the attention of global buyers including HarbourVest Partners as well as local competitors. The direct secondaries firm emerged victorious in a limited auction process to clinch the assets which include stakes in electronics recycling management firm Attero Recycling and d.light design, a solar lighting company in which NewQuest made a follow-on investment.

NewQuest’s 2016 figures tell it all: eight liquidity events, two IPOs, acquired interests in 13 companies, as much as $150 million invested, and just six months to exceed the hard-cap on its third fund which will focus on the Indian and Chinese markets. We’re sure readers will be hearing about more of the firm’s deals this year.

SECONDARIES ADVISOR OF THE YEAR IN ASIA
1. Eaton Partners
2. Park Hill
3. Lazard

Throughout 2016, market sources had told PEI that when the first Asian fund restructuring deal closes it would be a watershed moment for such transactions in the region. Eaton Partners led the charge by running an impressive restructuring of a fund containing growth stage assets. The deal, worth around $100 million, is thought to be the first such deal to close in Asia.

Eaton’s process involved 14 consumer and tech assets being moved into a new vehicle, providing liquidity for existing LPs and additional runway for the portfolio. The firm, which operates from Asian offices in Hong Kong and Shanghai, also completed over $150 million of secondaries deals during the year, including sales of single asset LP interests in local funds. If 2017 turns out to be the year Asian GPs begin to restructure their funds en masse, they’ll have Eaton to thank.

FRONTIER MARKET FIRM OF THE YEAR IN ASIA
1. Mekong Capital
2. VinaCapital
3. Anthem Asia

Vietnam-focused firm Mekong Capital has retained its title as Frontier Market Firm of the Year for the third year running. 

On the exit front, Mekong powered ahead of its peers with four full exits in 2016 – jewellery retailer PNJ, telecom conglomerate FPT and real estate companies Nam Long and Intresco. The firm also partially exited Vietnamese mobile phone retail chain MobileWorld, whose shares sold at 89x the original price when Mekong first invested in the company in 2007. 

Meanwhile, in fundraising, Mekong closed its fourth consumer-focused fund in June with $112 million in capital commitments. Mekong Enterprise Fund III has already completed three new investments and four more deals are expected to close in the first half of 2017. The firm’s Vision Driven Investing framework was also a highlight of 2016. It outlines key value-added approaches in areas such as management, corporate governance and external expertise.

FIRM OF THE YEAR IN AUSTRALASIA
1. Pacific Equity Partners
2. Affinity Equity Partners
3. Quadrant Private Equity

It’s a hat-trick in this category for Australia and New Zealand’s largest private equity firm Pacific Equity Partners. Having closed its fifth fund above its hard-cap at A$2.1 billion ($1.6 billion, €1.45 billion) in 2015, bringing its funds under advisement up to around A$3.5 billion, PEP had a busy 2016 continuing to put the capital to work.

As well as acquiring New Zealand education provider Academic Colleges Group in April, PEP acquired frozen foods provider Patties Foods, the manufacturer of household favourite brands such as Four ‘N Twenty Pies. The firm also sold its final stake in listed share registry and funds administration company Link Group in September. Having just sealed a bolt-on deal for its portfolio company Pinnacle Bakery to acquire Allied Mills, a manufacturer of flour, bakery premixes and frozen par-baked bread products, we’d wager 2017 will be just as busy for the Antipodean giant.

FIRM OF THE YEAR IN CHINA
1. PAG Asia Capital
2. Hony Capital
3. Primavera Capital Group

PAG Asia’s strong regional presence served it well in 2016. The firm announced the closing of its second Pan-Asia Buyout Fund in January, which was oversubscribed at $3.6 billion. The firm also led a successful investment round for Lexmark International in an all-cash deal valued at $4 billion.

The middle of the year brought more fundraising highs, as the firm announced a further close to its Real Estate Partners Fund on $1.3 billion. The fund is already 50 percent invested, and is poised to expand PAG Asia’s footprint in the real estate markets in North-East Asia and Australia.

A standout deal for the firm was its $200 million buyout of Golden Apple, a Chinese kindergarten operator, based in Chengdu. The firm finished 2016 with $16 billion worth of assets under management.

FIRM OF THE YEAR IN JAPAN
1. J-STAR
2. Advantage Partners
3. The Carlyle Group

J-STAR was a hive of activity in 2016. The firm bolstered its senior team, promoting two people to partner roles in July. The firm also closed back-to-back deals at the year’s end, investing in two companies out of its 2012-vintage J-STAR No 2 Investment Limited Partnership, which raised $195 million. In October, the firm neared the first close of its third buyout fund, collecting $150 million. J-STAR made seven new investments in 2016, including four bolt-ons.

The firm also made one exit. J-STAR also grew its operational team to four professionals who work closely with the portfolio companies.

FIRM OF THE YEAR IN KOREA
1. Affinity Equity Partners
2. MBK Partners
3. VIG Partners

Affinity Equity Partners enjoyed another successful year in Korea with a bumper exit from Loen Entertainment, a Korean-pop music label. The exit generated 6.7x investment capital and gross IRR of 98 percent. Loen was the largest private equity exit in Korea in 2016, and surpassed Affinity’s previous record exit from its Oriental Brewery investment in 2014. 

In April 2016, Affinity completed its investment into Burger King Korea, acquiring 100 percent for 210 billion won ($180 million, €171 billion) and becoming exclusive operator of the franchise.

Affinity has led the way in navigating Korea’s complex investment market for investors, with big ticket deals showing that it understands the local market and yields strong returns for investors.

FIRM OF THE YEAR IN INDIA
1. Everstone Group
2. KKR
3. ChrysCapital Partners

In the eyes of the private equity industry, there is a clear champion when it comes to investing in India. Singapore-based Everstone Group, which has won this category every year since 2011, has claimed the top spot again. The firm began investing in distressed Indian companies in 2016, and hired former Advent International director Avnish Mehra to lead the strategy.

“Everstone had an eventful and active 2016 with several control deals across multiple sectors such as ITeS, healthcare, and food,” Everstone co-founder and managing partner Sameer Sain said. “We also expanded our presence internationally, and added to our talent pool – both on the investing and operating side. We also drove results using our expertise across several portfolio companies.” 

The firm bought majority stakes in Indian pharmaceutical firms Ascent Health and Rubicon Research in Mumbai, and acquired bread and bakery brand Modern Foods. A very busy and eventful year.

FIRM OF THE YEAR IN SOUTH-EAST ASIA
1. KKR
2. Navis Capital Partners
3. Falcon House Partners

The private equity giant had a year to remember in South-East Asia, making three investments in the mobile technology, agro-processing and oil and gas sectors. A notable deal was GO-JEK where KKR led a $550 million Series D funding round in the Indonesian mobile ride-hailing and delivery platform.

That brought its total investment to $2 billion in the region, where KKR has a long investment history with more than 10 deals and a senior team that averages 16 years of experience. The roster was bolstered in 2016 by the addition of new regional head Ashish Shastry, leaving KKR poised to expand further in South-East Asia in 2017 with the growing sectors of education, healthcare, service sectors, and logistics among the possible targets.

FUND OF FUNDS MANAGER OF THE YEAR IN ASIA
1. Axiom Asia Private Capital
2. HarbourVest Partners
3. Pantheon

Singapore-headquartered Axiom Asia takes the top spot for the first time, garnering a third of the votes. Axiom Asia stood out for its fundraise for Axiom Asia IV, which had a final close of over $1 billion, smashing its target of $750 million after a little more than a year in market.

“2016 has been a very active year for the firm and fundraising was only a small part of what we did,” managing director Marc Lau said. “We also spent it deploying capital out of Fund IV and had good dealflow on co-investments and primaries.”

The fund of funds manager is also looking to pursue more investments in its core markets which include China, India, Japan and Australia, and to increase the fund’s secondaries and co-investment allocation to more than 20 percent.

DISTRESSED/SPECIAL SITUATIONS FIRM OF THE YEAR IN ASIA
1. SSG Capital Management
2. Bain Capital Credit
3. Canada Pension Plan Investment Board

For the third year in a row Hong Kong-based SSG Capital Management has proven there is no contest when it comes to special situations investing in the region, receiving almost half of all the votes.

While single name restructuring has been the core part of SSG’s strategy, one thing that has emerged in the last 18 months, according to SSG managing director and chief investment officer Edwin Wong, is the opportunity to purchase assets from financial institutions. SSG closed three such transactions in the past year, while raising capital for its two latest vehicles targeting a combined $2 billion. To date the firm is more than halfway to its target for its two latest funds, SSG Capital Partners IV and SSG Secured Lending Opportunities II, which both launched in September last year.

“The pipeline continues and we haven’t seen this activity since the Asian financial crisis so that’s been very positive,” Wong said.

PLACEMENT AGENT OF THE YEAR IN ASIA
1. Eaton Partners
2. Campbell Lutyens
3. UBS

It has been a successful year for Eaton Partners in Asia, following its acquisition by Stifel Financial group in January 2016. The firm placed close to $1 billion of LP interests for three of its Asian GPs. This included an oversubscribed $400 million fund for a Chinese GP, which closed in December 2016. 

The firm has also raised its profile in the three largest market opportunities in the region, and grew its presence in China by welcoming Hitesh Gumnani into its Shanghai deal team. The firm had another active year in the secondaries market, completing over $150 million of secondaries transactions including GP restructurings. Eaton Partners invested in the BlackRock-backed iCapital alternatives assets platform, proving that it is open to innovative ways to connect clients with investors.

LAW FIRM OF THE YEAR IN ASIA (FUND FORMATION)
1. Clifford Chance
2. Dechert
3. Debevoise & Plimpton

Over the past year Clifford Chance has been involved in the formation of numerous high-profile funds. It advised Standard Chartered Bank on the formation of a $1 billion private equity fund investing in Asia, Africa and the Middle East. It also represented Columbia Pacific Management on the formation of a fund and co-investment structure investing in healthcare assets in China, and another private equity fund manager on raising a $750 million fund investing in India. Its Funds and Investment Management group is headed by Singapore-based managing Partner Kai Niklas Schneider, a US-qualified lawyer with over 15 years of specialist experience in the funds sector and advises clients on all aspects of private funds from formation through to investment.

LAW FIRM OF THE YEAR IN ASIA (TRANSACTIONS)
1. Clifford Chance
2. Shearman & Sterling
3. Weil, Gotshal & Manges

Clifford Chance was also named Law Firm of the Year in the transactions category thanks to its extensive work in the sector during 2016. Notably the firm advised CVC Capital Partners on its $1.1 billion privatisation of Hong Kong-listed Nirvana Asia Ltd by way of a scheme of arrangement, MBK and TPG on their $1.2 billion leveraged buyout of Wharf T&T, and Carlyle on its disposal of its stake in New Century Real Estate Investment Trust, a Hong Kong-listed REIT.

It also advised Permira on its multi-year transitional arrangement with the Shanghai-based China team of Unitas Capital, a private equity firm. The firm has a strong Asia-Pacific presence, dating back to 1980. It now has 10 offices in six Asia-Pacific countries, including two in China – Beijing and Shanghai, both of which have been open more than 20 years.

LAW FIRM OF THE YEAR IN ASIA (SECONDARIES)
1. Kirkland & Ellis
2. Dechert
3. O’Melveny & Myers

Having received numerous nominations, it was no surprise Kirkland & Ellis won this category. The firm was involved in secondary transactions representing over $7 billon during 2016, working on many headline deals. In Asia-Pacific, it represented HarbourVest Partners on its acquisition of a portfolio of Australian and New Zealand assets from Rand Merchant Bank and the transfer of the management team into RMB Capital Partners.

It also represented Madison India Capital Management on its acquisition of a portfolio of early-stage Indian assets from a large venture capital fund with transaction financing provided by two large, multi-billion dollar secondary funds. “Our firm has been involved in a wide variety of secondary transactions over many years from all sides of the table, giving us a broad perspective on transaction structures and terms,” Michael Belsley, global practice leader, told PEI.