For a year that threatened to come off the rails at the beginning when, as one professional puts it, the region was confronted by “a Perfect Storm of war and plague”, 2003 produced a number of landmark deals and fund closures that led many to think it was one of the best years for private equity in the region on record. The figures bear testimony to this: investment almost doubled, while fundraising, despite a sizeable overhang of capital at many firms, was up eleven percent on the 2002 totals.
Some big transactions were completed, and it doesn’t surprise that PrivateEquityOnline’s readers voted one of them Asian Private Equity Investment of the Year 2003: Ripplewood Holdings’ buyout of the Japan-based fixed-line phone business of Vodafone Group. In addition to its size, which at ¥261 billion ($2.2 billion; €1.92 billion) made it one of the largest deals completed in the region. It was also noteworthy thanks to its funding: a syndicated loan provided by Mitsubishi Tokyo Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group was a pivotal element in the capital structure. Ripplewood chief executive Timothy Collins commented at the time that the deal was important because it showed Japan’s banks were becoming more willing to offer LBO-related debt, making it easier for firms to conclude big deals.
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PEO’s voters also recognised the AIG and Newbridge Capital acquisition of a 39.8 percent controlling stake in Hanaro, the second largest broadband Internet service provider and local fixed-line telephony provider in Korea, for $500 million.
Beyond dealmaking, US giant The Carlyle Group won praise as the firm behind the Asian Private Equity Fundraising of the Year, having closed its Japanese buyout fund, Carlyle Japan Partners. Tamotsu Adachi, Carlyle Managing director and head of the Japan team, described the Y50 billion ($470 million; €370 million) fundraising as an “important milestone: reaching this level demonstrates that the Japanese business community understands the positive and important role that private equity can play.”
In second place was the $350 million vehicle raised by HSBC Asia Pacific. The interim closing is expected to double to $700 million thanks to a commitment from the firm’s parent company.
The overall vote for Asian Private Equity Firm of the Year went to Ripplewood, making it a double for the New York-headquartered firm. Ripplewood came top of the pile, as much a winner for its Japan Telecom deal as for the exit of Shinsei Bank, the Japanese bank acquired by Ripplewood in 2000. The $2.35 billion flotation on the Tokyo Stock Exchange was one of the high points of the year for exits across the region.
In second place was CVC Asia Pacific, the Asia unit of CVC Capital Partners, which has long been one of the most active in the region. So active, in fact, that the firm is planning the successor to the firm’s debut private equity fund in the region, which closed on $500 million in 2000, with an additional $250 million contributed by Citigroup.