Asia: Growth spurt

Research results for 2004 from the Asian Venture Capital Journal (AVCJ) show that Asian private equity continues its rapid growth, surpassing US$106bn in total funds under management.

Asian private equity and venture funds raised US$10.6bn in 2004, compared with US$3.3bn in 2003. Large-cap funds such as Affinity Equity Partners, HSBC Private Equity and Unison Capital, all topping the US$700m mark, were among the main drivers for the increase.

Profitable exits were also a highlight of last year’s activity. Initial Public Offerings (IPOs) were the exit route of choice in 2004, with deals such as the Ripplewood-Mitsubishi Shoji Group’s Shinsei Bank listing, a transaction that netted billions for its investors, according to the AVCJ. Other notable IPOs include Ping An Insurance, Shanda, SMIC, Just Jeans, Bradken and Pacific Brands.

Overall, Asian private equity and venture capital firms invested just under US$17bn. Buyouts accounted for over 63% of the total, while growth/expansion capital and turnarounds accounted for 11% each. Distribution, telecommunications, and information technology were the top industries, respectively accounting for 18%, 16% and 14% of total investments.

Japan outpaced other countries, with US$7bn invested, followed by Australia, and by China, where US$1.95bn (versus 2003’s US$1.28bn) has been invested. Major Japanese transactions included Nikko Principal Investment’s US$2.2bn purchase of BellSystem24, as well as Carlyle Japan Partners’ and Kyocera’s buyout of DDI Pocket. For more on Asia, see feature this issue.