the digital edition
Transcription
the digital edition
Asia’s Private Equity News Source avcj.com February 05 2013 Volume 26 Number 06 Editor’s Viewpoint Asia’s PE community needs a public platform Page 3 News Archer, Avigo, Baring, Blackstone, IDG, Ironbridge, Orchid, RRJ Page 4 Deal of the week Hahn & Co buys shipping line out of bankruptcy Page 12 Everstone sees Transpole as logistics consolidator Page 13 Funds Lightspeed raises debut China venture fund Page 13 Suffering in silence Why Asia’s private equity associations must engage with government Focus Page 7 Industry Q&A Mukund Rajan of Tata Opportunities Fund Page 14 AVCJ Research Data f ile Page 15 Deal of the Week Bridging the VC gap King of call centers Asia’s start-ups face a Series A crunch Page 11 CVC secures Philippines BPO carve-out HAPPY holidays TO ALL OUR READERS! AVCJ WILL RETURN February 19, 2013 Page 12 Editor’s Viewpoint allen.lee@incisivemedia.com A platform for private equity A few weeks ago, I met the head of private equity of one of the largest pension funds in Asia and the world. A very impressive guy with terrific insight of the market, our conversation was great (from my standpoint) until I invited him to attend (and possibly speak in) some of our events. He said that there was little value for him to see most of the fund managers speaking on stage as they were already in his portfolio and he was familiar with their views. He also expressed concerns about being chased by GPs from other firms looking for allocations. I can relate to his point of view to a certain extent. Over the years, I’ve seen many notable speakers, from both the LP and GP sides, mobbed by other managers, investors, service providers and press as soon as they leave the stage. Many of these individuals, usually GPs (for various reasons) have come to accept this as part of the job. To LPs who shrink from the spotlight, I would suggest that there are two major reasons for participating at industry events such as ours: leadership and communication. Like it or not, many of the larger and more experienced organizations are looked upon for leadership by their peers. They need to communicate their views on the issues facing the market and its future direction – and where better than face-toface with their private equity colleagues. It can be as simple as that. As GPs often remark – with a mixture of frustration and opportunism – a number of Asia’s emerging LPs have little experience with the asset class, having just graduated from public equities and fixed income. They are unable to provide much insight on private equity and this makes it all the more important that institutional investors with longer track records seek to play a role in creating a sustainable future for the industry. Public discussion, and by extension education, is a good first step. While there are CIO get-togethers that are used as forums for such discussions, they tend to take place behind closed doors. What is a prospective LP to do if he doesn’t have an invitation? As for GPs, there are of course a number of reasons why they should participate, besides fundraising and marketing. We have seen, over Number 06 | Volume 26 | February 05 2013 | avcj.com our 25 years in the business, how beneficial it is for them to share with an audience their firm’s take on the opportunities in the market. As much as everyone hates to admit this, there is a bit of a herd mentality within private equity. Discussing the trends, challenges and opportunities helps the industry to focus on issues that require collective effort. And perhaps more importantly, top GPs – just like top LPs – should show their leadership within and outside the private equity and venture capital community. As I have argued before, the industry is now too big to be ignored. Private equity deals dominate the financial media (take a bow, Michael Dell and Silver Lake), while venture capitalists are acknowledged as the brains behind tech gurus working for NASDAQ-listed companies. The role of a senior partners at a global buyout firm is not that dissimilar to that of a CEO at a Fortune 500 company. The need to communicate outside your own pool of staff, portfolio companies and LPs is obvious. Private equity has been misunderstood in the past and it is up to the industry as a whole to make sure this doesn’t happen in the future. An open forum is the ideal setting for leaders to come together and make their voices heard – to the industry and to politicians, government officials, corporate executives and the media, all of whom also attend our events. Allen Lee Publisher Asian Venture Capital Journal Managing Editor Tim Burroughs (852) 3411 4909 Staff Writer Alvina Yuen (852) 3411 4907 Andrew Woodman (852) 3411 4852 Creative Director Dicky Tang Designers Catherine Chau, Edith Leung, Mansfield Hor, Tony Chow Senior Research Manager Helen Lee Research Manager Alfred Lam Research Associates Herbert Yum, Jason Chong, Kaho Mak Circulation Manager Sally Yip Circulation Administrator Prudence Lau Senior Manager, Delegate Sales Anil Nathani Senior Marketing Manager Stacey Cross Marketing Manager Rebecca Yuen Director, Business Development Darryl Mag Manager, Business Development Samuel Lau Sales Coordinator Debbie Koo Conference Managers Jonathon Cohen, Sarah Doyle, Zachary Reff, Conference Administrator Amelie Poon Conference Coordinator Fiona Keung, Jovial Chung Publisher & General Manager Allen Lee Managing Director Jonathon Whiteley Chairman Emeritus Dan Schwartz Incisive Media 20th Floor, Tower 2, Admiralty Centre 18 Harcourt Road, Admiralty, Hong Kong T. (852) 3411-4900 F. (852) 3411-4999 E. info@avcj.com URL. avcj.com Beijing Representative Office Room 1805, Building 10, Jianwai SOHO, 39 East 3rd-Ring Road, Chaoyang District, Beijing 100 022, China T. (86) 10-5869-6205 F. (86) 10-5869-7461 E. beijing@avcj.com The Publisher reserves all rights herein. Reproduction in whole or in part is permitted only with the written consent of AVCJ Group Limited. ISSN 1817-1648 Copyright © 2013 3 News GLOBAL Blackstone buys majority stake in seaplane operator ever periods as the fleet management books of Australia’s biggest firms are set to go to tender. CVC seeks $12.2b for latest global buyout fund The Blackstone Group has acquired a majority stake in two Maldives-based seaplane operators, Maldivian Air Taxi (MAT) and Tran Maldivian Airways (TMA). GREATER CHINA CVC Capital Partners is targeting EUR9 billion ($12.2 billion) for its next global buyout fund. The private equity firm plans to raise less than the EUR10.75 billion it got for its previous global fund in 2008 but has set no upper limit. Baring Private Equity Asia (BPEA) has completed its exit from Airtac International Group, a Taiwan-founded but now mainland Chinaheadquartered manufacturer of pneumatic components. The PE firm sold its remaining 7.2% holding through via the public market, raising NT$1.89 billion ($64 million). SFERS hires New York State Common’s Art Wang San Francisco Employees’ Retirement System (SFERS) has appointed Art Wang as managing director for private markets, with responsibility for private equity, real estate and real assets. He joins from New York State Common Retirement Fund (NYSCRF) where he was director of private equity. ASIA PACIFIC Anil Ahuja departs 3i Anil Ahuja, managing partner and head of Asia for 3i, has quit the private equity firm. Ahuja is leaving to pursue other opportunities, although he will still operate as a part-time consultant to 3i. Samir Palod, a partner in 3i’s infrastructure business, has been appointed as managing director for India with immediate effect. RRJ Capital raises $3.5b for Fund II RRJ Capital has reportedly raised $3.5 billion for its second fund. The Hong Kong-based GP, which was set up by Richard Ong, formerly of Goldman Sachs and Hopu Investment Management, originally targeted up to $5 billion for the vehicle. AUSTRALASIA Adventure Capital targets $100m VC fund Australian VC firm Adventure Capital is targeting around $100 million for its debut vehicle. It has already received $20 million in commitments from high net worth individuals and is now approaching institutional players. Quadrant-owned Virtus Health targets IPO in 2013 Quadrant Private Equity is targeting a A$500 4 Baring PE Asia exits Taiwan-listed Airtac The two firms provide services to resort islands from Hulhule Airport Island. Founded in 1992, MAT is claimed by Blackstone to be biggest seaplane operator in the world. Trans Maldivian Airways, founded in 1989, has more than 20 seaplanes in its fleet. Combined, the businesses will operate 44 seaplanes with more than 100,000 flights annually. The terms of the deal were not disclosed. The owners of the companies will still retain a stake in the business and serve as directors on the board, Blackstone said in a statement. “We are excited to partner with MAT and TMA, whose seaplane operations have contributed significantly to the development of resort islands,” said Prakash Melwani, chief investment officer of Blackstone’s private equity unit. Located southwest of India, the Maldives has a population of about 400,000 and a group of 1,190 coral islands. Around 198 of the islands, spread across 559 miles, are inhabited. Popular for its “one-island one-resort” concept, the island has seen a surge in tourist arrivals in recent years with 2012 reaching an all-time high of nearly one million visitors. million ($520 million) IPO this year for its portfolio company Virtus Health, Australia’s largest fertility business. It was reported in September that Quadrant had refinanced Virtus with A$225 million of debt after a failed sales process. Ironbridge’s FleetPartners to tap debt markets Fleet Partners, an Australian vehicle-leasing firm backed by Ironbridge and the Government of Singapore Investment Corp. (GIC), plans to raise more than $200 million in debt ahead of its IPO. The firm is gearing up for one of its busiest Cathay Fortune abandons Discovery Metals bid Cathay Fortune Corporation (CFC), the private equity group founded by Chinese billionaire Yong Yu, has abandoned its A$830 million ($848 million) takeover bid for Australian copper miner Discovery Metals. Discovery shares plummeted as much as 7.5% to a five-month low of A$0.96 during morning trading in Sydney on Monday. RRJ Capital acquires kidswear brand Kingkow RRJ Capital has acquired a 75% stake in Hong Kong-based children’s wear retailer Kingkow. Kingkow was set up in 1998 and is owned by SKC Group. The firm manufactures and sells children’s clothing and accessories for ages 14 and under. Baring increases stake in HK-listed Magic Holdings Baring Private Equity Asia (BPEA) has increased its stake in Hong Kong-listed beauty products retailer Magic Holdings, purchasing 7.34 million shares on the open market for HK$22.26 million ($2.9 million). It remains the largest individual investor in the company with a 21.03% holding. Chinese firms say red tape hinders M&A in Europe More than three-quarters of Chinese companies encounter operating difficulties in the EU while nearly half have been obstructed by regulatory issues, according to a survey by the EU Chamber of Commerce in China. CPEH backs Malaysia’s Patimas Computers China Private Equity Investment Holdings avcj.com | February 05 2013 | Volume 26 | Number 06 News (CPEH) has acquired a minority interest in Patimas Computers, a Malaysian information and communications technology provider. The PE firm, which is listed on London’s AIM bourse, purchased 43 million shares at MYR0.10 apiece for a total consideration of MYR4.3 million ($1.38 million). It now holds a 5.2% stake in Patimas. Lunar enters partnership with Pinco Pallino Lunar Capital has entered into a partnership with Italian children’s fashion brand “I Pinco Pallino” to expand its presence in China and East Asia. Under the agreement, Lunar and Pinco Pallino, which is owned by Italian private equity firm Opera, plan to set up a joint venture. Trafigura subsidiary buys Ausfuel from Archer Capital Archer Capital has exited Ausfuel to Puma Energy, a subsidiary of Trafigura, for a reported cash sum of $650 million. The Australian GP acquired a majority stake in the company from CHAMP Ventures in 2010, paying around A$120 million ($125 million). Puma is taking full ownership of Ausfuel, buying out minority shareholders in addition to Archer. Through the addition of Ausfuel - which owns the Gull, Choice and Peak service stations - to its existing portfolio, Puma will become Australia’s largest independent fuel retailer. the International Finance Corporation (IFC), the investment arm of the World Bank. A memorandum of understanding will be the foundation of discussions for setting up the fund, which will focus on small and growth enterprises (SGEs) across sectors in the north-eastern India. NSR targets exit as India’s Ortel files for IPO New Silk Route (NSR) is set to exit Indian cable TV provider Ortel Communications with the company planning to raise as much as INR1 billion ($18.7 million) through an IPO. This is the second time Ortel has tried to go public, having pulled out of an offering two years ago due to volatile market conditions. Orchid-backed Time Watch raises $105m in HK IPO Sequoia joins search engine Series A round Time Watch Investments has raised HK$810 million ($105 million) in its Hong Kong IPO after pricing shares at the top end of the indicative range. Orchid Asia participated as a cornerstone investor, taking just over one quarter of the 600 million shares offered. Sequoia Capital India has joined Qualcomm Ventures in investing over $1 million in Dexetra, the maker of Friday, a personal search mobile application. According to TechCrunch, the actual amount invested, said to be between $1 million and $2 million, has not been disclosed as there is the possibility new investors will be joining the round at a later date. NORTH ASIA Japan’s Orix signs up for Mongolia Fund Japan’s Orix Corporation will invest in Mongolia Opportunities Fund I, reputedly the country’s first ever PE vehicle. Orix aims to use the fund, established by Mongolia Opportunities Partners, to make its own first investments in country. HIG Capital sells Anvis to Japan’s Tokai Rubber HIG Capital has sold German car parts maker Anvis to Japan’s Tokai Rubber Industries for EUR132 million ($177.91 million). Financial terms of the deal were not undisclosed. HIG first acquired Anvis in December, 2010. SOUTH ASIA Avigo, Matrix back Indian education group Avigo Capital and Matrix Partners India have invested INR1 billion ($18.7 million) in education service provider Maharana Infrastructure and Professional Services (MIPS) This is the second round of funding for MIPS. Number 06 | Volume 26 | February 05 2013 | avcj.com The Trafigura subsidiary made its first investment in the country only a matter of weeks ago, paying approximately $200 million for Neumann Petroleum. Neumann owned 120 service stations in Queensland and New South Wales. The Ausfuel acquisition brings another 110 retail sites and 11 depots, with coverage extending to Western Australia, Northern Territory and South Australia. “We have been successful in building this business from selling 300 million liter per annum to more than 1.2 billion liter per annum in less than three years, and in the process have significantly improved its performance, revenues and profitability,” Peter Gold, managing director at Archer, said in a statement. “We are delighted to be selling to Puma Energy who share a similar vision and can take it to the next level.” IDG targets $175m for second India fund IDG Ventures India is targeting $175 million for its second India-focused fund, according to a US regulatory filing. The predecessor vehicle raised $150 million in 2007. India’s Yes Bank to set up PE fund with IFC Yes Bank, India’s fourth largest privately owned lender, is to create a joint fund with Tata Capital to raise maiden distress fund Tata Capital, the private equity arm of India’s Tata group, plans to raise nearly INR5 billion ($94 million) for its maiden distress assets fund. The Tata Capital Special Situations Fund has already attracted five state-run banks as LPs and may be fully subscribed by March. Aditya Birla-backed V-Mart raises $2.6m Aditya Birla-backed V Mart Retail, a budget Indian retailer, has raised INR141 million ($2.6 million) from anchor investors, after finalizing the allocation of 674,000 shares at INRR210 apiece. IDFC Premier Equity Fund purchased 64.70% of the shares, with Morgan Stanley Mutual Fund taking the remainder. ePlanet exits agrochemicals firm ePlanet will exit Indian agro-chemicals firm Sree Ramcides Chemicals as Japan’s SDS Biotech invests INR1 billion ($18.8 million) in the company for a 65% stake. ePlanet, which invested around INR220 million for 36% stake in the company in 2008, exited for INR500-520million. 5 Cover Story tim.burroughs@incisivemedia.com Asian advocacy PE practitioners like light-touch regulation and usually prefer to stay at arm’s length from government. A combination of global and national pressures has forced industry associations to revisit their strategies The battle lines have been drawn by China’s regulators as they fight for the right to govern domestic private equity. It is a heavyweight matchup between the National Development and Reform Commission (NDRC), the country’s top policymaking body and the industry’s incumbent regulator, and the China Securities Regulatory Commission (CSRC), which is keen to follow the developed market model where the securities watchdog is responsible for private equity. Caught in the middle are numerous industry associations, pulled this way and that by a complicated patchwork of allegiances. This territorial dispute broke into the open towards the end of last year as policymakers ended their deliberations over proposed alterations to the Securities Investment Funds Law. The big question was whether private equity would be included, and therefore brought under the CSRC’s purview. “On the one hand, less onerous regulation is good for the industry, and participants prefer not to be subject to a second set of rules in addition to those laid down by the NDRC,” says James Wang, a partner at Han Kun Law Offices in Beijing. “On the other hand, they don’t want to cut ties to the CSRC. PE firms have traditionally relied on IPOs as their main exit channel.” Any impressions that the matter had been settled when PE was excluded from the regulation were undermined by the small print. The language leaves sufficient room for interpretation that the CSRC could still wield significant influence over “non-publicly offered funds.” Meanwhile, several leading private equity firms appear to be voting with their feet. Hony Capital is among those to have joined the new Asset Management Association of China (AMAC) as “asset management members.” To some, this is tantamount to quasi record-filing with the CSRC. “When we deal with the NDRC and CSRC it’s clear they are at war with each other,” one international LP tells AVCJ. “Both are using industry associations as battlefields to recruit more members and gain influence. As long as the situation remains unclear they will continue the battle. If you are a local GP, which side are you talking to? Or are you talking to both sides?” Industry participants are not opposed to Number 06 | Volume 26 | February 05 2013 | avcj.com regulation – the current NDRC guidelines are seen by many as insufficient, allowing smaller funds to evade oversight – but they want a single set of rules from a single authority. As Maurice Hoo, global leader of Orrick’s M&A and PE practice and legal counsel to the China Venture Capital & Private Equity Association (CVCA), points out, the concern was that another layer of regulation would bring additional costs because there wouldn’t be any reconciliation between the two. A need for clarity China isn’t the only Asian jurisdiction where there is a need for regulatory clarity, although in other markets regulators are fighting to keep private equity off their desks. “If you ask the Financial Supervisory Commission (FSC), they say it’s nothing to do with them because it’s not public markets while the Ministry of Economic Affairs applies the final stamp but is just a coordinator,” says C.Y. Huang, they are part of an industry that has grown massively in the last decade, particularly in Asia. By the end of 2012, more than 3,000 private equity firms were active in the region, with $454 billion in funds under management. Ten years ago less than half the number of firms controlled about one fifth of the assets. “Private equity has gone from almost nothing to very sizeable,” says David Pierce, a partner of FLAG Squadron Asia and non-executive chairman of the Hong Kong Private Equity & Venture Capital Association (HKVCA). “With greater prominence, if you carry on trying to stay below the radar, doing things as before, you risk being regarded with suspicion. Most US PE people were generally shocked at how the industry has been characterized by the media. They see themselves as good guys doing good things.” With the lines still to be drawn by China’s regulators, industry associations are preoccupied with ensuring these lines don’t extend too far. International players, meanwhile, are responding “We are lobbying the Hong Kong government to make some changes to tax and regulation – and need to demonstrate to them that private equity – John Levack is a strategically important industry” chairman and CEO of local GP FCC Partners and chairman of the Taiwan M&A and Private Equity Council (MAPECT). “PE firms run between these agencies, asking who can help.” The contrast is not rooted in ideology so much as onshore versus offshore, and it runs to the heart of the challenges facing Asia’s collection of private equity markets. For the likes of China and India, the question is how to regulate the asset class on a domestic level in order to protect investors who may not fully understand it. For the rest, PE is more entrenched yet faces unprecedented global regulatory pressure. These two extremes share a common origin. Whether an individual manages renminbi raised from high net worth individuals in China or US dollars from pension funds in North America, to regulatory blueprints that are already largely in place in the US and Europe. The Foreign Account Tax Compliance Act (FATCA) has placed more onerous disclosure requirements on managers who raise capital from US-based investors above certain thresholds. However, the EU’s Alternative Investment Fund Managers Directive (AIFMD) causes more concern. The worst case scenario for Asia-focused managers is that they will have to set up onshore structures in Europe in order to market to investors in the region. This might fall beyond the means of many smaller operators. An acceptable middle ground is Asia managers receiving a passport to operate in the EU based on the credibility of their local regulators – but what about those whose offshore status means they aren’t tied to any 7 Cover Story tim.burroughs@incisivemedia.com particular authority? This question prompted the HKVCA to action. “When AIFMD came out in draft form a couple of years ago we engaged the Hong Kong government to participate in the process of seeking comment,” says Pierce. “I believe it was the association’s first attempt to influence and help the government understand our industry. Before that we weren’t really on their radar.” Who regulates whom? The association subsequently set up a dedicated technical committee and reached out to local regulators, to mixed effect. Although a number of Hong Kong-based PE firms, wary of AIFMD requirements, have chosen to register with the Securities & Futures Commission (SFC), the regulator’s response has been passive. Public markets remain top priority and there is little interest in PE funds are domiciled in the Cayman Islands with nothing more than an advisory presence in Hong Kong. Private equity firms managing these funds only fall within Hong Kong’s regulatory remit if they are selling to local investors or if they offer other financial products, such as hedge funds, that already subject to oversight. On this basis, half the HKVCA’s membership base is unregulated. “The reality is that many of the component actions in private equity are regulated activities, but may be exempt from the need to be regulated here if you are advising a whollyowned parent that is established elsewhere,” says John Levack, managing director of Electra Partners and head of the association’s technical committee. “The SFC is comfortable with that.” As a result, funds that do register with the SFC are subject to a form of regulation that provides little insight into their operations. Requirements include filing returns every six months to confirm there is enough cash in the coffers to cover employee salaries – a check more relevant to brokerages than PE firms – and senior professionals sitting exams on capital markets. The concerns are twofold. First, European authorities might examine Hong Kong’s regulatory regime and decide that it is insufficient for local managers to qualify for the AIFMD passport system. Second, mainland AVCPEC: Asia’s association of associations T he first attempt at creating a pan-Asia private equity association came more than a decade ago; it didn’t last. Fast forward to the present, the industry is larger and more globally integrated – and, in the form of the Asia Venture Capital and Private Equity Council (AVCPEC), there is a renewed effort to pool ideas and experience from across the region. “We revived the idea two years ago,” says Johnny Chan, executive director of Crosby Asia and president of the Hong Kong Private Equity and Venture Capital Association (HKVCA), who is heavily involved in the initiative. “It really sprung from the idea that more of our members are facing similar problems. There is a higher regulatory element that is being imposed or will be imposed on the industry.” AVCPEC’s membership comprises nine private equity associations – one each from Japan, South Korea, Australia, India, Singapore and Hong Kong, and two from China. There has also been interest from overseas, with Britain’s industry association (BVCA), participating in some of the early exchanges. According to Mark Florman, CEO of the BVCA, the association has agreements with 45 counterparts globally and looks to support developing nations in particular. “I’m not saying we have the right solutions but our experience of arguing different cases and different models might help,” Florman adds. In its initial stages, AVCPEC is keeping the administrative duties to a minimum and trying to serve as an association of associations – a B2B forum for sharing industry best practice. Not everyone is drinking the kool-aid, though. Some industry participants note that it is difficult to accommodate the needs of groups that represent industries at different stages of development. Mahendra Swarup, a partner at Avigo Partners and president of the Indian Private Equity & Venture Capital Association (IVCA), speaks up in defense of the council, observing that coordinated support from regional counterparts makes it easier for the IVCA to approach the government. “If the government hears from local associations and foreign associations it has more impact,” he says. 8 Chinese PE firms that want to raise US dollardenominated capital might look to use Hong Kong as a fundraising hub and apply for local licenses, but ultimately opt for Singapore because the regulatory environment is more suitable. Tax is an important consideration in this respect. If a Hong Kong fund is regulated onshore does that mean it could trigger permanent establishment and no longer be ignored by the tax authorities as an offshore entity? Given that the authorities don’t tax capital gains, this shouldn’t be a problem – but Hong Kong has no legal definition of capital gains. Singapore, meanwhile, has offered clarity. “We are lobbying the Hong Kong government to make some changes to tax and regulation – and need to demonstrate to them that private equity is a strategically important industry,” says Levack. “We have asked Hong Kong University of Science & Technology to look at the indirect jobs that are created. These include many white-collar jobs for graduates which are vital to Hong Kong.” This kind of proactive advocacy is already a hallmark of other industry associations’ approaches. The British Private Equity & Venture Capital Association (BVCA) – which is older and better resourced than its Asian brethren, and deals with a broader range of issues throughout Europe – seeks to influence UK economic and industrial policy before it is made. This includes identifying sectors in which member firms might want to participate and making suggestions to the government on how to facilitate investment. “Our members own thousands of companies in the UK and many of these companies are overseas as well. We have to show that we are part of national industries and that we have a lot of dry powder which needs to be put to work in British companies,” says Mark Florman, the association’s CEO. He describes the BVCA as having a “think-tank element,” with permanent staff coming from policy and regulatory backgrounds and offering a clear understanding of how policymaking works. Action by necessity It is worth noting that this approach was in part the product of necessity. While the BVCA still has its critics, six years ago the association was in a far worse position when a previous CEO was pilloried by a House of Commons Treasury committee inquiry and then savaged by his own members for failing to defend the industry. The association was essentially forced into a corner and had to reconsider its engagement strategy Comparisons can be drawn with certain Asian jurisdictions in this respect. Several industry associations that claim to have made progress with domestic regulators can trace their efforts avcj.com | February 05 2013 | Volume 26 | Number 06 Cover Story tim.burroughs@incisivemedia.com back to times when the industry was under pressure. The Australian Private Equity & Venture Capital Association’s (AVCAL) advocacy efforts began in 2002 and the creation of venture capital limited partnerships, but a greater challenge came five years later when the Senate Standing Committee on Economics investigated the asset class. “It was after the Qantas bid [a PE consortium tried to buy the carrier in 2006] so there was a generally negative perception in the media and in politics about the role of private equity,” recalls Katherine Woodthorpe, CEO of AVCAL. “We had to spend time with members of the senate committee, but also every influencer – advisors and representatives of both political parties.” reasons that few in the industry could fathom. The situation prompted MAPECT to intensify its lobbying efforts. “We are trying to make the government realize that this is a serious situation. They say it is just one case but it isn’t: this one case has damaged confidence of all PE investors in Taiwan,” says Huang. “There is no certainty regarding government approval and as a result there have been no major PE transactions in Taiwan in the last 2-3 years.” The council’s concerns are threefold: that the authorities are fundamentally opposed to privatizations; that they are overprotective of minority shareholders’ interests; and that they don’t offer clear enough guidance on the interpretation of regulations. It took the initiative Then vs. now: Growth in Asian private equity 500,000 3,500 3,000 2,500 300,000 2,000 200,000 1,500 Firms US$ million 400,000 1,000 100,000 500 0 2002 2012 2002 Assets Assets (US$m) 2012 0 PE Firms No. of firms Source: AVCJ Research More firefighting was required when the Australian Tax Office retrospectively revised its approach to taxing private equity profits and industry participants required clarity. There has also been the public fallout from a number of leveraged buyouts struck prior to the global financial crisis to contend with. AVCAL’s proactive strategy has seen the introduction of private equity primer seminars for journalists and politicians. Last year 27 senior civil servants attended one of these sessions in Canberra; a similar event was held for government advisors several months ago. “We start these sessions by placing a bunch of different products on the table – brand names for everything from skin creams to sportswear – and people had no idea they are owned by private equity,” Woodthorpe says. Australia differs from most Asian markets in that large leveraged buyouts of brand-name businesses are available and they create more waves in the public and political spheres. It is a state of affairs with which Taiwan’s PE community can sympathize after a KKR-backed management buyout of electronic components manufacturer Yageo was rejected by regulators in 2011 for Number 06 | Volume 26 | February 05 2013 | avcj.com with the Securities and Futures Bureau last year and now has quarterly meetings with the agency. Huang says this newfound engagement has delivered progress, but the concerns have yet to be fully addressed. The other jurisdiction in which relations between regulators and industry associations have recently been formalized is India. Officials at the Reserve Bank of India, the Securities and Exchange Board of India (SEBI) and the Ministry of Finance have each been tasked with handling PE-related issues. Action came after the Indian Private Equity & Venture Capital Association (IVCA) stepped up its engagement in response to particular regulatory issues. In the past couple of years, the country’s PE industry has faced uncertainty over the tax treatment of offshore investment vehicles under the now-postponed General Anti-Avoidance Rules (GAAR); a wholesale reworking of the classification requirements for onshore funds; and withstood an attack by the Department of Industrial Policy & Promotion (DIPP) on put and call options used to secure private equity exits. “The DIPP’s about-turn was entirely because of the IVCA,” claims Mahendra Swarup, the association’s president and a partner at Avigo Partners. “With AIF, the outcome wasn’t 100% satisfactory to everyone in the industry but what emerged from the drafting process was much better because of interaction with SEBI. We have done a fairly good job in educating the government on what the asset class does, that we aren’t hot money and shouldn’t be categorized with other types of funds.” Horses for courses Australia, Taiwan and India may stand out as jurisdictions in which industry associations have tried to draw or redraw their relationships with regulators, but they are united by little else. The success of their engagement, the number and nature of stakeholders involved, the structure of their industries and the economies in which they operate, even the political systems of which the regulators are part – all are different. Consequently, while there are common concerns regarding fundraising activity in Europe and the US, there is no common solution at local level. China, for example, has larger, more independent-minded industry associations representing GPs in the form of the CVCA and the China Association of Private Equity, and then a collection of groups led by regulators (the NDRC created its own version of the CVCA to counterbalance the CSRC-linked AMAC). It is difficult to see consensus being reached apart from in extreme circumstances, but does that miss the point? Under the present governance structures it is difficult to see the advocacy process in China replicating that of Western-oriented markets. “Lobbying associations are useful – they mean your voice gets heard,” says Vincent Huang, a partner at Pantheon who is involved with the Limited Partners Association of China. “As to whether we can make a difference, this is more of a long-term issue. I don’t think we are so powerful that can change the government’s position.” In the fullness of time, a more mature private equity industry with a larger stake in the economy as a whole may be in a position to deliver sophisticated advocacy. There is also likely to be greater appreciation of the need to pre-empt the risk of a knee-jerk regulatory response to a crisis. As other Asian jurisdictions are discovering, this is easier to achieve when government agencies, and indeed the public, understand what the asset class does and how it can contribute to industrial development. “In the past in Hong Kong we were a small industry, employing a relatively small number of people and were not active in engaging with the authorities,” says Johnny Chan, executive director of Crosby Capital and president of the HKVCA. “This approach doesn’t work anymore.” 9 Focus andrew.woodman@incisivemedia.com Tech crunch On both sides of the Pacific, the venture capital industry is suffering from a dearth in Series A funding. How widespread is the problem and who is most affected? America’s venture capital community has been preoccupied of late by talk of a “Series A crunch,” whereby Silicon Valley start-ups struggle to bridge the gap between seed-stage funding and a second round of institutional investment. Growth companies in Asia find themselves in a similar position. “Asia is a maturing market so a lot of the money available has been at the seed stage,” says Vinnie Lauria, co-founder of Golden Gate Ventures, a Southeast Asia- focused start-up accelerator based in the Singapore and Silicon Valley. “Once portfolio companies need to do a Series A round there aren’t a lot of people to turn to.” He isn’t optimistic about entrepreneurs’ prospects over the next 18 months. AVCJ Research supports the idea that Asia could well be experiencing Series A crunch. Since 2010 the number of venture capital investments under $3 million has increased by 20% to more than 400 deals. At the same time, transactions between $3-5 million, the traditional sweet-spot for Series A, have dropped by 33% to fewer than 100. The contrast is so pronounced that in 2012 deals under $3 million where at their highest in four years while those investments in the higher bracket were at a four-year low. “We have definitely seen it across Southeast Asia,” confirms Frederic de Bure, a partner with IDG Ventures in Singapore, which typically targets Series A rounds. “Around 18 months ago, you would see many more investors willing to go into a Series A round with us, and they felt comfortable taking that risk. But in the last nine months we have seen a retrenchment in appetite for guys who are traditionally Series A investors.” De Bure blames this decline on greater uncertainty at the broader macroeconomic level compared to 6-9 months ago, which has put pressure on GPs to take less risk. Digestion problems Another contributing factor is that there has been so much investment at the seed stage that there are simply more companies seeking Series A funding than in the past. It comes as no surprise that the need for early-stage institutional support is most acute in the technology sector: the computer and IT sectors accounted for 46% of all sub-$3 million deals by value in 2012 and 43% by volume. Number 06 | Volume 26 | February 05 2013 | avcj.com “I think it is very simple,” says Chris Evdemon, a partner with Beijing-based incubator Innovation Works. “We had a couple of amazing years in 2009 and 2010, a once-in-a-decade opportunity where we had the whole mobile internet sector opening up. Every VC covering the China market jumped onto it and it made for an over-heated environment.” Evdemon likens the drop off in the series A investment to the the calm after the storm, anticipating a rebound in investor confidence as company valuations rationalize. “When put it in context it is a very natural trend but if it is looked at in isolation that’s people start to get worried,” he adds. means there is a disincentive for large early stage investors when you consider the amount of time required from the time of the initial investment until you can take the company public.” Into the breach? So who is filling the gap in funding? One trend has been for larger investments to be made at the seed stage is through so-called “super angels,” a relatively new addition to the Asian start-up landscape. Jungle Ventures, which launched its $10 million super angel fund last October, did so with a to view supporting go-to market plans of investee companies. But sometimes companies need more than just cash. Venture capital investment in Asia by size 2009 2010 2011 2012 0 200 Under $3 million $5-10 million 400 600 $3-5 million Over $10 million 800 1,000 No. of Deals Source: AVCJ Research The counterargument is that there is no shortage of capital at all and would-be Series A investors – in China, at least – are being put off by the lack of a clear exit channel. The US IPO market has been more or less closed to Chinese listings, due to investor suspicion of small- to mid-cap companies for nearly two years. The bourses in Hong Kong and mainland China offer little respite for tech start-ups because listing candidates are expected show several years of profitability. Even if the profits are there, the waiting list for mainland IPOs is long. “It is a shortage of visibility of liquidity; you simply can’t forecast the exit timing,” says Gary Reischel, founder and managing partner with Qiming Venture Partners in Shanghai. “This “I suppose they can be one way of bridging the gap and from a funding standpoint they are sufficient,” says IDG’s de Bure. “But what they don’t provide is the experience and knowledge of a traditional venture capital fund. It is not just about the money, it is the network they provide.” The flip side is that the Series A crunch may sober up Asia’s venture capital industry. While there may be a return to early investment euphoria as confidence recovers, some hope the crunch may lead to greater restraint in future. “In bad times you have to pull the belt tighter and instead of doing ten investments, you may do five,” says de Bure. “It just makes you focus on your returns and mitigate the downside even more so than in the past. It is not a bad thing from a fund perspective.” 11 deal of the week tim.burroughs@incisivemedia.com CVC agrees Philippines’ biggest-ever buyout The Philippines has supplanted India in recent years to become the call center capital of the world as its business process outsourcing (BPO) sector recorded massive growth. Revenues are expected to more than double in the next five years, reaching $25 billion by 2016. In addition to call centers services, the country offers everything from HR and payroll processing to financial accounting. A host of global third-party BPO service providers and multinationals’ in-house operations have taken up residence in the Philippines, and this was where CVC Capital Partners began its search for potential acquisition targets. “There are a lot of captive providers and we are looking for the day when the in-house operations no longer have to be 100% owned and could be carved out,” Brian Hong, a senior managing director at CVC, tells AVCJ. However, the asset that became available was entirely homegrown. SPi Global Holdings, a subsidiary of Philippine Long Distance Telephone Company (PLDT), dominates the call center space as well as offering domain expertise in the largest minority deals in the country when healthcare and publishing. It primarily serves it acquired a 15% stake in Rizal Commercial US and Europe-based customers with close to Banking Corp. for $115 million. Hong suggests 18,000 employees worldwide. that the PE firm’s track record in the country PLDT last year decided to sell an 80% stake in helped facilitate the transaction. the business as part of efforts to divest non-core “If you are a global firm and you are trying to assets. Several private equity firms expressed an get someone to engage with you in a country interest, but CVC felt it had an edge, given its like the Philippines, the question is are you really prior knowledge of the sector and relationships going to get there and invest a forged with company large sum of money,” he says. management before the auction PLDT will retain a 20% interest process began. in SPi, which means it can “We had a pretty good participate in future growth of understanding of the industry,” the business. SPi posted revenues says Hong. “We hoped they of $170 million for the first nine would do an exclusive deal with months of 2012, up by 16% us and, even though they ended year-on-year, and had an EBITDA up going for a process, it largely BPO: Big in the Philippines margin of over 20%. For CVC, came down to who PLDT and PLDT’s continued presence is a source of comfort. management wanted to work with.” “Our 20% partner is the second-largest listed The deal values SPi at more than $300 million company in the Philippines and they know – with CVC’s commitment split equally between the local market,” Hong says. “They are also a equity and debt – making it comfortably the customer on the call center side and a supplier in largest buyout ever seen in the Philippines. Two terms of telecom and data connectivity.” years ago, CVC was also responsible for one of Hahn & Co. in $130m bankruptcy buyout which makes it hard for private equity firms Sourcing deals through South to enter this kind of process,” says Scott Hahn, Korea’s bankruptcy courts is notoriously CEO of Hahn & Co, the GP selected by the court complicated, but even by these standards Korea as preferred bidder for Korea Line. “It is a very Line presented a challenge. The sale process was domestic process.” officially launched late afternoon on December Hahn & Co. has previous experience in this 21, the Friday before what most people treated area, having acquired Daehan Cement from as a long weekend, given that Christmas Day troubled Daehan Group for $65 million last year fell on the following Tuesday. The deadline for via bankruptcy proceedings. The private equity submitting letters of interest was December 26, firm began its homework on Korea Line before with due diligence commencing on January 2. the process began and so was In all fairness, time was of able to act quickly. Five parties the essence. Korea Line, the expressed an interest in the asset country’s fourth-largest shipping and this was whittled down to company, entered bankruptcy two, with Hahn & Co. winning out and restructuring in early 2011 over a shipping finance company. and the process was protracted The enterprise value of the by creditors waiting in vain for transaction is KRW1.1 trillion ($1 evidence of a turnaround in Korea Line: Distressed asset billion), with the PE investor set to the global freight market. As a commit KRW140 billion in equity for its holding, publicly-traded company, Korea Line was legally pending creditor approval. It is comfortably obliged to delist on March 31 if fresh capital the biggest investment made by the Korean couldn’t be found. GP, whose team spun out from Morgan Stanley “With a court receivership there are no Private Equity Asia (MSPEA) in 2010 and raised meetings with management before you invest, 12 $750 million for its debut fund the following year. Korea Line has 32 vessels and $1.5 billion in assets, trailing only Hanjin Shipping, Hyundai Merchant Marine and STX Pan Ocean among domestic carriers. It posted revenues of $600 million in 2011 and EBITDA of $190 million. “This is a sector we have been looking at it for a long time,” Hahn adds. “This company only does bulk – it only imports raw materials that Korea Inc requires. The business is not trade dependent because South Korea has zero natural resources. We are the number two importer of liquefied natural gas, third for steaming coal, fourth for crude oil and third for coking coal.” Korea Line slipped up by overextending itself during the pre-global financial crisis boom years when the sector was at the peak of a super cycle. The company deviated from its core strategy and moved into ship chartering, taking vessels on 3-4 year leases from Europe and hiring them on a short-term basis, and at a higher margin, to domestic shipping companies. When global freight rates collapsed so did Korea Line’s business model. avcj.com | February 05 2013 | Volume 26 | Number 06 deal of the week / Funds andrew.woodman@incisivemedia.com / tim.burroughs@incisivemedia.com Everstone bets on India’s logistics space commitment to TVS Logistics last year – and this The fact that Dehli-based Transpole goes some way to explaining the level of interest is regarded one of India’s largest shipping in the sector. According to AVCJ Research, India logistics firms yet still accounts for around is one of the most active countries in the region 3% of its market speaks volumes for the level when it comes to transportation and distribution: of fragmentation in the sector. Everstone About one third of the $1.8 billion invested in the Capital is betting on Transpole’s potential as a consolidation play, paying INR2.2 billion for a near sector region-wide last year went to India. The other attraction is growth. On a gross 25% stake of the company. revenue basis, the value of India’s freight “We essentially want to help the company forwarding industry was strengthen its trade links and estimated at INR450 billion logistics infrastructure, which ($ 8billion) in 2012, and it is means setting up more offices expected to reach INR750 billion and infrastructure and building by 2016. the customer base,” explains “We have always liked freight Dhanpal Jhaveri, co-founder forwarding logistics sector and partner at Everstone. “We because it is an asset light will also assist Transpole in their model,” says Jhaveri. “There are a inorganic growth opportunities lot of businesses in this industry through acquisition of Logistics: Fragmented sector that are asset intensive, such as businesses which we believe fit shipping and trucking companies. What we like well within the company’s core strategy.” about the Transpole model is really that they are Rival private equity firms are seeking similar providing end-to-end logistics and they have the outcomes with other companies – KKR offered scale for a lot of efficiencies in the business.” a similar investment rationale for its $47 million Transpole’s services range from freight forwarding to warehousing and distribution, and it has built out a strong presence across the region with 540 employees based in 18 offices in India as well as locations in Singapore, Malaysia, Hong Kong, South Korea and China. The company has achieved compound annual growth of more than 60% over the last five years. Jhaveri says the new funding will enable Transpole to expand its operations in India and overseas. He notes that there is opportunities are increasing for such companies as customers seek out more sophisticated forms of supply chain management. Everstone is not the first PE firm to recognize the Transpole’s potential – Fidelity Growth Partners invested $13.5 million two years ago – and it moved fast to secure the transaction, agreeing the invest five months after identifying the company as a potential target. The investment was made through Everstone Partners II, a 2009 vintage vehicle which reached its final close of $580 million in 2011 and is now around 40% deployed. Lightspeed nets $168m for China fund Lightspeed Venture Partners’ China fund has been more than seven years in the making, having been under consideration ever since the GP included an international allocation – Asia and Israel, in addition to the US – in its seventh global vehicle. The decision to proceed was taken in 2010. “The VC market is in a better place than in 2005-2006 and a dedicated fund makes sense,” Ron Cao, co-founder and managing director of Lightspeed China Partners, tells AVCJ. “When we launched the fund in 2011 we were completing the investment phase of global Fund VIII. We felt that prior to raising our global Fund IX, it was the right time to launch our China vehicle.” The latest global fund closed last year at $675 million, down from the $800 million raised for its predecessor in 2007. Lightspeed China Partners I has now completed fundraising, beating its $150 million target to close at $168 million after about 14 months in the market. The US parent is a significant LP in the China fund and roughly half the investors are also participants in the global vehicle. Cao notes that Number 06 | Volume 26 | February 05 2013 | avcj.com “You need to have the right fund size and the there are more Asian, Middle East and European right entrepreneurial operating background. names on the LP roster for the China fund than Entrepreneurs want more value-add than for its global affiliate. The broader geographical before. They realize that Series A isn’t just about mix also means a stronger family office presence maximizing the valuation but finding the right – many of the Asian LPs fall into this category – investment partner.” alongside the pension funds, fund-of-funds and Lightspeed’s previous China investments endowments that feature prominently in the have involved internet, mobile and technologyglobal fund. enabled consumer and business services. These Fund IX has no formal co-investment rights industries will dominate the new fund’s portfolio with the China vehicle but it will come in on – it has already completed four certain deals, typically later-stage deals, including vacation rental investments. The previous global service provider Tujia.com and fund deployed about 15% of its internet-based financial services corpus in the country. search provider Rong360 – but Lightspeed China Partners Cao expects to see more activity I is expected to invest in 15-18 in enterprise solutions as well. companies over a three-and-a“We are spending a lot of time half-year period, predominantly looking at areas such as big data on Series A transactions. Cao Lightspeed: China-focused and software as a service,” he says. says the fund size was restricted “Chinese companies are adopting technology to within range of its $150 million target so this faster than people think. They have to respond investment thesis wouldn’t be overextended. to labor costs getting higher so they leverage “There aren’t many funds in China that really technology to become more efficient.” focus on early-stage Series A deals,” he explains. 13 Industry Q&A | Mukund Rajan alvina.yuen@incisivemedia.com Waiting for a rebound India’s private equity industry has suffered criticism from disappointed LPs in the last couple of years. Mukund Rajan, managing partner of Tata Opportunities Fund, identifies a few positives Q: How does the Tata Opportunities Fund fit into Tata Capital’s overall strategy, given that you also have other specialist funds? A: Private equity is a key focus area for Tata Capital, which has individual funds with distinct mandates. Given the growth trajectory of the Tata Group in recent years, PE is emerging as an important source of risk capital. The Tata Opportunities Fund will provide its investors an alternative route to participate in the group’s growth by investing into or alongside Tata companies. We have secured commitments to the tune of $600 million from LPs and made have made investments to date of roughly 20% of the fund, which is in line with the pace we expected. Q: How important is the Tata brand when deal sourcing? A: The Tata brand is one of the most trusted brands in India, as well as a being recognized globally. The group’s reputation for good corporate governance is synonymous with trust and reliability, and that is reflected in the confidence investors have that their interests are well protected and secure with Tata. This has been a significant differentiator for Tata-backed funds when prospecting for private equity opportunities. Q: Foreign investors appear to be bearish on India at present. What do you see as the major problems? A: The Indian macro story suffered a setback as a result of the slowdown in the economy, as well as doubts and negative perceptions built up about the 14 “GPs need to identify clear exit routes at the time of investment and plan for multiple scenarios that also factor in market volatility – especially given public markets do not offer easy exit routes at the moment” government’s commitment to economic reform. However, this is expected to change in the wake of recent reformist tendencies. Going forward, we should see greater alignment between the political agenda and policy measures to address India’s economic growth potential. The other major issue affecting foreign LPs’ perception is the performance of Indian funds. Their key concerns in this regard include lower returns on investments, corporate governance deficits, insufficient exits, and instability of teams. Q: To what extent do you consider potential exit channels when investing? A: Our first investment is only 20 months old, so we have not yet exited any deals. However, identifying exits is extremely important, and we do consider this at the time of investment. Multiple exit routes are built into our analyses, including IPOs, trade sales, and sales to financial investors and promoters. GPs need to identify clear exit routes at the time of investment and plan for multiple scenarios that also factor in market volatility. There has been an explosion in private equity investments in India in the past five years, but not every fund has been sophisticated in its approach to exits. As the industry consolidates, I think there will be greater discipline. Q: Some Indian GPs are trying to diversify their product offerings. Why is this? A: It is important to be flexible on investment strategies in India, given the uncertainties and occasional volatility witnessed in the economy and the public markets, and also the stiff competition amongst funds for quality transactions. Illustratively, some funds have decided to assign a significant portion of their portfolios to PIPE deals. That said, we would advocate identifying a strategy that a GP feels it has the skill sets to execute upon, and working towards effective implementation rather than frequent changes in strategy. Q: Tata is in the process of launching a fund with Power Finance Corp. How attractive is India’s power sector? A: India’s per capita power consumption is about 700 kilowatt hours, almost onefourth that of China. Given a much higher global average and the increasing footprint of India’s manufacturing industry, the country will definitely require more investment in this sector – a need that was clearly underlined by the nationwide blackouts witnessed earlier this year. The major concerns that have impacted the sector are the viability of the provincial electricity boards which are significant buyers of power, and the availability and pricing of fuel for utilities. Once these issues are addressed, we can expect to see an enormous amount of investment in the sector. Q: To what extent are valuations still a concern for private equity investors in India? A: Valuations have moderated in recent quarters in the wake of depressed public markets, a high interest rate environment and more reasonable promoter expectations. Valuations have to be specific to an asset and should not be generalized within a sector. That said, we are looking closely at sectors benefiting from consumer discretionary and sectors where India has a comparative advantage over other countries either in manufacturing or in services. avcj.com | February 05 2013 | Volume 26 | Number 06 Private Equity Data file | AVCJ research AVCJresearch@incisivemedia.com private equity in asia Investment Breakdown by Country From 1 January to 31 January 2012 Amt. Invested US$m No. of Deals (Disc.) No. of Investees South Korea Investee Country 887.8 10 10 10 Japan 494.7 8 6 8 Malaysia 299.3 2 2 2 Australia 276.5 7 4 7 India 228.1 19 15 19 Vietnam 200.0 1 1 1 China (PRC) 176.6 22 11 22 Hong Kong 112.0 4 2 4 Indonesia 35.0 2 1 2 Singapore 15.5 4 2 4 Maldives - 2 - 2 Taiwan - 4 - 4 fund-raising monitor Closed Fund Location: Malaysia Fund Name: Creador I, LLC Closing Amount: US$132 million (final close) Launch Date: November 2011 Fund Manager/Advisor: Creador Sdn. Bhd. Stage Focus: Buy-outs (MBO/MBI/LBO), Expansion/ Growth Capital, Mezzanine/ Pre-IPO, PIPE Financing, Privatization, Public to Private Industry Focus: Computer related, Consumer products/services, Electronics, Financial services, Information technology, Media, Medical, Retail/Wholesale, Services – Non Financial, Telecommunications, Transportation/Distribution Geographical Focus: India, Indonesia, Malaysia Contact: Brahmal Vasudevan Phone: (60) 3-2182-6868 Email: brahmal@creador.co Website: www.creador.co Update: Creador has held a final close of its maiden fund at US$132 million, below the original target US$350 million. The Fund aims to invest in SouthEast Asian countries like Indonesia and Malaysia, besides India. New Funds Location: Japan Fund Name: Globis Fund IV, L.P. Target Amount: US$170 million Launch Date: January 2013 Fund Manager/Advisor: Globis Capital Partners & Co. Stage Focus: Expansion/ Growth Capital, Mezzanine/ Pre-IPO, Start-up/ Early Stage Industry Focus: Computer related, Consumer products/services, Ecology, Electronics, Financial services, Information technology, Media, Retail/Wholesale, Services - Non-Financial, Telecommunications Geographical Focus: Japan Contact: Yoshito Hori Phone: (81) 3-5275-3939 Email: hori@globis.co.jp Website: www.globiscapital.co.jp Update: Globis Capital Partners is raising its fourth Japan fund, Globis Fund IV, at US$170 million. The Fund will invest in early stage startups and carve-out businesses primarily in Japan. Number 06 | Volume 26 | February 05 2013 | avcj.com 15