News Flash

BREAKING NEWS

Sharp decline in all private equity activities during the first half of 2009, compared to the same period in 2008:-

Institutional Investors' Allocations

144 allocations, a 45.7% drop
organisations in China dominated the allocation profile, accounting for 53.5%
institutions from North America and Europe have scaled back their allocations to Asian private equity funds by an average 64%

Funds

74.9% decline in fresh capital pool

US$8.3 billion of fresh capital, the worst record since 2005
US$3.1 billion for growth/expansion situations recorded, a 72.8% decline
buyout and venture capital funds witnessed a drop of over 80% in their fund pools, recording U$2.8 billion and US$686.5 million respectively
Pan-Asia funds led in accounting for 36.8% of the fresh capital
funds for China and India took up more than half of the fresh capital pool, recording US$2.5 billion and US$2.1 billion respectively

Investments

72% decline in investment activities

US$8.9 billion in transaction total, a 72% drop
growth/expansion situations led, recording US$4.4 billion in transaction aggregate
buyouts slowed to US$4.2 billion, a 77% decline
infrastructure-related investments witnessed a 71% drop, amounting to US$572 million
venture capital investment activities were negligible

Divestments

US$3.3 billion known to have returned to investors' coffers, a 55% decline
China led in accounting for 78.8% of the returned capital
returned capital in buyouts of US$247.3 million, more than 90% decline
growth/expansion situations accounted for US$3.0 billion

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INSTITUTIONAL INVESTORS

IFC to Invest in Pakistan's Engro Chemical

The International Finance Corporation ('IFC') announced its proposed investment in Engro Chemical Pakistan Limited, a Pakistan-based chemical company. (Pakistan)

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CIC Cements Another Direct Investment

China Investment Corporation has committed to subscribe up to US$35 million of BBMG Corporation ('BBMG')’s H-shares. BBMG is a state-owned cement supplier based in Beijing. (People's Republic of China)

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Asian SWFs Seek US Medical Device

Asian sovereign wealth funds ('SWFs') and private equity funds are among the investors that provided US$50 million to US-based ConforMIS, Inc.. There were suggestions that SWFs from Singapore and Kuwait are among the investors. ConforMIS makes medical devices for the treatment of osteoarthritis and joint damage. (Offshore)

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FUNDS

India Value Fund IV Oversubscribed

India Value Fund Advisors Private Limited confirmed to ASIA PRIVATE EQUITY REVIEW that India Value Fund IV has achieved its final closing at US$725 million. It is the largest fund outside of the infrastructure sector during the first half of 2009 (India)

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Keytone Raises US$200 Million for Its Maiden Fund

Keytone Ventures has successfully raised US$200 million for its debut fund. The private equity firm was formed by the former managing partner of KPCB China, Mr Joe Zhou. (People’s Republic of China)

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Chengdu Guidance Fund Embraces Foreign Partners

Chengdu Yinke Venture Capital, a government-backed guidance fund, is to set up to two yuan-denominated funds with foreign parties. Each fund will have a target size of Rmb500 million, with South Korea-based KTB Ventures and the Hong Kong-based DT Capital Partners being the applicable foreign parties. (People's Republic of China)

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INVESTMENTS

Matrix India Engineers an Education Deal

Matrix Partners India has announced its 1 billion rupee (US$20 million) investment in the education provider FIITJEE Limited, which provides training for several engineering certification examinations. (India)

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Norwest Venture Takes Stake in Retail Finance Co.

Norwest Venture Partners has invested over 1.2 billion rupees (US$24 .6 million) for an 8% equity stake in Shriram City Union Finance Limited ('Shriram City'). Coincidentally, Merrill Lynch disposed all of its remaining holdings in Shriram City on the same day when Norwest Venture Partners purchased the target company's shares. (India)

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Warburg Pincus Packs More Capital into Storage Co.

Warburg Pincus has agreed to subscribe to newly-issued convertible notes in China StorageCo.. This is the second capital deployment to the company by the private equity firm which first invested in China SotrageCo. in 2007. The company engages in large-scale onshore oil and chemical storage terminal operations in China. (People's Republic of China)

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Tsing Capital Spotlights Neo-Neon's Shares

Tsing Capital Management Company is to invest HK$232 million (US$30 million) in the Hong Kong-listed Neo-Neon Holdings Limited ('Neo-Neon'), a lighting company. Neon-Neon first raised capital from private equity investors back in 1996. (People's Republic of China)

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KKR Linked to Another Deal in China

Kohlberg Kravis Roberts & Co. could team up with other institutions and invest in International Far Eastern Leasing Co., reported the Wall Street Journal. The target is in equipment leasing business. (People's Republic of China)

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Olympus Capital Wades into Hydropower Co.

Olympus Capital Holdings Asia confirmed its US$47.5 million investment in Zhaoheng Hydropower Co., Ltd. ('Zhaoheng Power') which is listed on the over-the-counter market in the USA. Zhaoheng Power currently owns and operates three hydropower stations in China. (People's Republic of China)

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Venture Investors Connect with Borqs

The Beijing-based Borqs International Holding Corp has raised US$17.4 million from a clutch of investors, including Norwest Venture Partners, GSR Ventures Management Co. Ltd and Keytone Ventures. The latter two are existing investors of Borqs which is an open source mobile application provider. (People's Republic of China)

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Angels Give Lift to Transmex's Expansion Plans

Sirius Venture Consulting Pte Ltd. has invested an estimated S$1.2 million (US$0.8 million) in Transmex Systems International ('TSI') which provides customised tracking solutions applicable to multiple industries. Earlier, both investors had invested in TSI. (People’s Republic of China)

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DIVESTMENTS

DEG Exits Lanco Amarkantak

Deutsche Investitions-und Entwicklungsgesellschaft mbH ('DEG'), has sold its entire stake in Lanco Amarkantak Power Pvt Ltd. back to the latter's parent company, Lanco Infratech Ltd., for an undisclosed sum. The development financial institution held an 11.8% stake in the power company. (India)

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Mahindra Holidays Debuts with Modest Gains

Mahindra Holidays & Resorts India Limited ('Mahindra Holidays'), backed by Jacob Ballas Capital India Pvt. Ltd., was listed on Indian stock exchanges. The private equity firm invested in Mahindra Holidays in early 2008. (India)

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Adani Power Plans to Float Again

Adani Power Limited ('Adani Power') has revived its public listing plan, recently submitted its latest red herring prospectus. Adani Power is backed by 3i Group plc which has invested an aggregate 9.744 billion rupees (US$242.2 million) the company. (India)

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Concrete Co. Yields Solid Return for Morgan Stanley PE

Morgan Stanley Private Equity Asia ('MSPEA') has reportedly sold a portion of shares in China Shanshui Cement Group Ltd ('Shanshui') and is estimated to have returned HK$620 million (US$80 million) to its coffers. In April, MSPEA sold a parcel of holdings in Shanshui which is listed on Stock Exchange of Hong Kong. (People’s Republic of China)

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China Pacific Insurance Revisits H-share Plan

Shanghai-listed China Pacific Insurance (Group) Co. ('CPIC Group') is to revive its “H” share listing plan after failed attempts in 2008. CPIC Group counts The Carlyle Group and Prudential Financial, Inc. as its foreign investors. It is currently listed on the Shanghai Stock Exchange. (People's Republic of China)

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China Merchants Sells Portions of Holdings in Banks

China Merchants China Direct Investment Ltd., managed by China Merchants China Investment Management Ltd. has sold portions of its holdings in both Industrial Bank Co., Ltd. and China Merchant Bank Co., Ltd., clocking an aggregate returned capital of Rmb$996.1 million (US$145.6 million). (People's Republic of China)

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PEOPLE ON THE MOVE

Mr P. Jayendra Nayak

Mr P. Jayendra Nayak has joined Advent International plc as a member of the firm's Operating Partner Programme. (India)

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July 20, 2009 Please click the above for excerpts from the latest edition of Asia Private Equity Review BREAKING NEWS INSTITUTIONAL INVESTOR IFC to Invest in Pakistan's Engro Chemical CIC Cements Another Direct Investment Asian SWFs Seek US Medical Device FUNDS India Value Fund IV Oversubscribed Keytone Raises US$200 Million for Its Maiden Fund Chengdu Guidance Fund Embraces Foreign Partners INVESTMENTS Matrix India Engineers an Education Deal Norwest Venture Takes Stake in Retail Finance Co. Warburg Pincus Packs More Capital into Storage Co. Tsing Capital Spotlights Neo-Neon's Shares KKR Linked to Another Deal in China Olympus Capital Wades into Hydropower Co. Venture Investors Connect with Borqs Angels Give Lift to Transmex's Expansion Plans DIVESTMENTS DEG Exits Lanco Amarkantak Mahindra Holidays Debuts with Modest Gains Adani Power Plans to Float Again Concrete Co. Yields Solid Return for Morgan Stanley PE China Pacific Insurance Revisits H-share Plan China Merchants Sells Portions of Holdings in Banks PEOPLE ON THE MOVE Mr P. Jayendra Nayak Please click the above for excerpts from the latest edition of APER Greater China Edition	News Flash
	BREAKING NEWS Sharp decline in all private equity activities during the first half of 2009, compared to the same period in 2008:- Institutional Investors' Allocations 144 allocations, a 45.7% drop organisations in China dominated the allocation profile, accounting for 53.5% institutions from North America and Europe have scaled back their allocations to Asian private equity funds by an average 64% Funds 74.9% decline in fresh capital pool US$8.3 billion of fresh capital, the worst record since 2005 US$3.1 billion for growth/expansion situations recorded, a 72.8% decline buyout and venture capital funds witnessed a drop of over 80% in their fund pools, recording U$2.8 billion and US$686.5 million respectively Pan-Asia funds led in accounting for 36.8% of the fresh capital funds for China and India took up more than half of the fresh capital pool, recording US$2.5 billion and US$2.1 billion respectively Investments 72% decline in investment activities US$8.9 billion in transaction total, a 72% drop growth/expansion situations led, recording US$4.4 billion in transaction aggregate buyouts slowed to US$4.2 billion, a 77% decline infrastructure-related investments witnessed a 71% drop, amounting to US$572 million venture capital investment activities were negligible Divestments US$3.3 billion known to have returned to investors' coffers, a 55% decline China led in accounting for 78.8% of the returned capital returned capital in buyouts of US$247.3 million, more than 90% decline growth/expansion situations accounted for US$3.0 billion [Back to the table of contents] INSTITUTIONAL INVESTORS IFC to Invest in Pakistan's Engro Chemical The International Finance Corporation ('IFC') announced its proposed investment in Engro Chemical Pakistan Limited, a Pakistan-based chemical company. (Pakistan) [Back to the table of contents] CIC Cements Another Direct Investment China Investment Corporation has committed to subscribe up to US$35 million of BBMG Corporation ('BBMG')’s H-shares. BBMG is a state-owned cement supplier based in Beijing. (People's Republic of China) [Back to the table of contents] Asian SWFs Seek US Medical Device Asian sovereign wealth funds ('SWFs') and private equity funds are among the investors that provided US$50 million to US-based ConforMIS, Inc.. There were suggestions that SWFs from Singapore and Kuwait are among the investors. ConforMIS makes medical devices for the treatment of osteoarthritis and joint damage. (Offshore) [Back to the table of contents] FUNDS India Value Fund IV Oversubscribed India Value Fund Advisors Private Limited confirmed to ASIA PRIVATE EQUITY REVIEW that India Value Fund IV has achieved its final closing at US$725 million. It is the largest fund outside of the infrastructure sector during the first half of 2009 (India) [Back to the table of contents] Keytone Raises US$200 Million for Its Maiden Fund Keytone Ventures has successfully raised US$200 million for its debut fund. The private equity firm was formed by the former managing partner of KPCB China, Mr Joe Zhou. (People’s Republic of China) [Back to the table of contents] Chengdu Guidance Fund Embraces Foreign Partners Chengdu Yinke Venture Capital, a government-backed guidance fund, is to set up to two yuan-denominated funds with foreign parties. Each fund will have a target size of Rmb500 million, with South Korea-based KTB Ventures and the Hong Kong-based DT Capital Partners being the applicable foreign parties. (People's Republic of China) [Back to the table of contents] INVESTMENTS Matrix India Engineers an Education Deal Matrix Partners India has announced its 1 billion rupee (US$20 million) investment in the education provider FIITJEE Limited, which provides training for several engineering certification examinations. (India) [Back to the table of contents] Norwest Venture Takes Stake in Retail Finance Co. Norwest Venture Partners has invested over 1.2 billion rupees (US$24 .6 million) for an 8% equity stake in Shriram City Union Finance Limited ('Shriram City'). Coincidentally, Merrill Lynch disposed all of its remaining holdings in Shriram City on the same day when Norwest Venture Partners purchased the target company's shares. (India) [Back to the table of contents] Warburg Pincus Packs More Capital into Storage Co. Warburg Pincus has agreed to subscribe to newly-issued convertible notes in China StorageCo.. This is the second capital deployment to the company by the private equity firm which first invested in China SotrageCo. in 2007. The company engages in large-scale onshore oil and chemical storage terminal operations in China. (People's Republic of China) [Back to the table of contents] Tsing Capital Spotlights Neo-Neon's Shares Tsing Capital Management Company is to invest HK$232 million (US$30 million) in the Hong Kong-listed Neo-Neon Holdings Limited ('Neo-Neon'), a lighting company. Neon-Neon first raised capital from private equity investors back in 1996. (People's Republic of China) [Back to the table of contents] KKR Linked to Another Deal in China Kohlberg Kravis Roberts & Co. could team up with other institutions and invest in International Far Eastern Leasing Co., reported the Wall Street Journal. The target is in equipment leasing business. (People's Republic of China) [Back to the table of contents] Olympus Capital Wades into Hydropower Co. Olympus Capital Holdings Asia confirmed its US$47.5 million investment in Zhaoheng Hydropower Co., Ltd. ('Zhaoheng Power') which is listed on the over-the-counter market in the USA. Zhaoheng Power currently owns and operates three hydropower stations in China. (People's Republic of China) [Back to the table of contents] Venture Investors Connect with Borqs The Beijing-based Borqs International Holding Corp has raised US$17.4 million from a clutch of investors, including Norwest Venture Partners, GSR Ventures Management Co. Ltd and Keytone Ventures. The latter two are existing investors of Borqs which is an open source mobile application provider. (People's Republic of China) [Back to the table of contents] Angels Give Lift to Transmex's Expansion Plans Sirius Venture Consulting Pte Ltd. has invested an estimated S$1.2 million (US$0.8 million) in Transmex Systems International ('TSI') which provides customised tracking solutions applicable to multiple industries. Earlier, both investors had invested in TSI. (People’s Republic of China) [Back to the table of contents] DIVESTMENTS DEG Exits Lanco Amarkantak Deutsche Investitions-und Entwicklungsgesellschaft mbH ('DEG'), has sold its entire stake in Lanco Amarkantak Power Pvt Ltd. back to the latter's parent company, Lanco Infratech Ltd., for an undisclosed sum. The development financial institution held an 11.8% stake in the power company. (India) [Back to the table of contents] Mahindra Holidays Debuts with Modest Gains Mahindra Holidays & Resorts India Limited ('Mahindra Holidays'), backed by Jacob Ballas Capital India Pvt. Ltd., was listed on Indian stock exchanges. The private equity firm invested in Mahindra Holidays in early 2008. (India) [Back to the table of contents] Adani Power Plans to Float Again Adani Power Limited ('Adani Power') has revived its public listing plan, recently submitted its latest red herring prospectus. Adani Power is backed by 3i Group plc which has invested an aggregate 9.744 billion rupees (US$242.2 million) the company. (India) [Back to the table of contents] Concrete Co. Yields Solid Return for Morgan Stanley PE Morgan Stanley Private Equity Asia ('MSPEA') has reportedly sold a portion of shares in China Shanshui Cement Group Ltd ('Shanshui') and is estimated to have returned HK$620 million (US$80 million) to its coffers. In April, MSPEA sold a parcel of holdings in Shanshui which is listed on Stock Exchange of Hong Kong. (People’s Republic of China) [Back to the table of contents] China Pacific Insurance Revisits H-share Plan Shanghai-listed China Pacific Insurance (Group) Co. ('CPIC Group') is to revive its “H” share listing plan after failed attempts in 2008. CPIC Group counts The Carlyle Group and Prudential Financial, Inc. as its foreign investors. It is currently listed on the Shanghai Stock Exchange. (People's Republic of China) [Back to the table of contents] China Merchants Sells Portions of Holdings in Banks China Merchants China Direct Investment Ltd., managed by China Merchants China Investment Management Ltd. has sold portions of its holdings in both Industrial Bank Co., Ltd. and China Merchant Bank Co., Ltd., clocking an aggregate returned capital of Rmb$996.1 million (US$145.6 million). (People's Republic of China) [Back to the table of contents] PEOPLE ON THE MOVE Mr P. Jayendra Nayak Mr P. Jayendra Nayak has joined Advent International plc as a member of the firm's Operating Partner Programme. (India) [Back to the table of contents]
Stay tuned for APER's forthcoming issue for full coverage of the above! About Centre for Asia Private Equity Research Ltd To stop receiving this News Flash in future, click here or reply to unsubscribe@asiape.com with "Unsubscribe" in the subject header.