2020亚洲私募股权投资洞察（英文版）_20页_1mb

Asia Private Equity Insights 2020 Summary

Core Content

The Asia Private Equity (PE) Insights 2020 report outlines the challenges and opportunities faced by the PE market in Asia during 2019 and the outlook for 2020. It highlights the impact of global economic uncertainty, the US-China trade war, and the novel coronavirus on investment activities, while also emphasizing the potential for growth in key sectors such as technology, healthcare, and biotechnology.

Main Views

1. PE Market Overview (2019)

• The PE market in Asia experienced a 45% decline in deal value in the first three quarters of 2019 compared to the same period in 2018.
• Technology remained the top sector in terms of deal value, followed by Pharmaceutical, Medical, and Biotechnology.
• The overall PE market in Asia was weak, with only US$57.3 billion in deal value across 286 deals.

2. Crisis Creates Opportunities

• The US-China trade war and economic slowdown led to distressed assets becoming a more attractive investment option.
• The first-phase trade deal signed in January 2020 was expected to boost investor confidence and potentially improve the global economy.
• Hong Kong has taken steps to enhance its fund industry by streamlining licensing procedures and offering tax exemptions to attract more investors.

3. Outlook for 2020

• Despite economic and geopolitical uncertainties, 42% of investors planned to increase their exposure to PE in 2020, citing the attractive risk-return ratio of PE assets.
• Distressed strategies were the most preferred, with 42% of respondents expecting to increase their allocation.
• Growth funds and venture capital were also in demand, with 28% and 27% of respondents planning to increase their allocation, respectively.
• Fund of funds was the least appealing strategy, with 34% of respondents planning to decrease their allocation.

4. Sector Opportunities and Challenges in 2020

• Technology and Biotechnology are seen as major growth areas, driven by innovation, government support, and increasing demand for advanced solutions.
• Healthcare is also a promising sector, supported by the Healthy China 2030 blueprint and the expansion of biotechnology.
• Industrials continue to be a top sector for investment due to technological advancements and market expansion.
• Challenges include government policies, tariffs, economic slowdown, and political unrest, which have discouraged investment and affected fundraising.

5. Exit Trends

• Trade sales remained the most common exit route, accounting for over 50% of all exits.
• Secondary buyouts and IPOs were also significant, though their proportions remained relatively stable.
• PE investors expect trade sales to continue being the preferred exit option in 2020 due to its reliability and market appeal.

6. IPO Market Trends in Hong Kong and Mainland China

• In 2019, Hong Kong raised US$40 billion in IPOs, driven by two mega deals: Alibaba's secondary listing and Budweiser's IPO.
• Hong Kong remained the top IPO destination globally for the sixth time in ten years.
• The STAR Market in Shanghai, launched in July 2019, supported high-tech and innovative companies, with 70 companies raising RMB82 billion through IPOs.

7. Emerging Markets in Asia

• Southeast Asian countries such as Thailand, Vietnam are becoming attractive alternatives to the Chinese market.
• China's PE market has been growing steadily since 2009, with assets under management reaching RMB10,817 billion in the first nine months of 2019.
• RMB-denominated funds are more preferred by investors in China, with over 80% of funds raised in this currency.

8. Key Challenges for PE in 2020

• Market saturation and limited opportunities are major concerns, with 54% of respondents indicating that too much money is chasing too few opportunities.
• High purchase price multiples in middle-market buyouts are also a concern, potentially leading to overvaluation and lower returns.
• Investor caution due to economic uncertainty and political tensions has discouraged new investments in some regions.

9. Transaction Advisory Services Leadership Team

• The report highlights the expertise of the Transaction Advisory Services (TAS) leadership team in Hong Kong and China, with key members including:
  • Barry Tong – National Head and Joint APAC Head of TAS
  • Yvonne Ye – Director of TAS, Hong Kong
  • Ron Pau, Carol Mak, and Polly Wong – Senior and Manager levels in TAS
• In China, the leadership includes:
  • Liu Dongdong – National Head of Advisory Services
  • Barry Tong, Lloyd Liu, Edward Feng, and Kevin Chan – Partners in TAS
  • Frank Wu – Partner of TAS, China

Key Information

• Global M&A deal value in Asia dropped 28% in Q1-Q3 2019 to US$383.5 billion.
• Technology and Biotechnology are expected to be key growth areas in 2020.
• Distressed assets are becoming a strategic alternative for investors seeking attractive returns.
• Hong Kong and China are the top PE investment destinations in Asia, with China replacing Japan as the most attractive market.
• Fundraising in China has been affected by economic uncertainty and US-China trade tensions, with investors holding back and waiting for recovery.
• IPOs in Hong Kong and China continued to attract significant investment, with the STAR Market supporting innovative companies.

Conclusion

The Asia PE market in 2020 is expected to face challenges due to economic and political uncertainties, but also opportunities in innovation-driven sectors. Distressed assets and emerging markets are likely to play a major role in shaping the future of the PE landscape. Technology and biotechnology are anticipated to lead the growth trends, supported by government initiatives and increased demand. Hong Kong and China remain central hubs for PE investment and IPO activity, with a positive outlook for continued development.