North Asia 2017 AVCJ private equity and venture capital report 13 th annual edition
CONTENTS 1 Introduction 4 A sea change both sides of the Korea Strait? 2 Assets under Management and M&A 6 M&A muscle, asymmetric AUM 3 Fundraising 12 Fundraising fever 4 Investments 17 Immense investment 5 The Exit Environment 24 Listings still the Cinderella exit 6 Active Players in the Market 32 North Asia notables 7 Looking Ahead 39 Prospects promising, rebalancing pending II
ASSETS UNDER MANAGEMENT AND M&A M&A muscle, asymmetric AUM FIG 2.1 North Asia - Capital Under Management in Private Equity The persistent imbalance in size and maturity of the private equity sector in and was fully on show during 2016 in the two markets comparative AUMs. Private equity assets under management in grew a paltry 3.4% between 2015 and 2016, from just over $66.8 billion to just over $69 billion. With its more active market, it comes as no surprise that managed to grow its private equity AUM by almost ten times as great a proportion, or almost 36%, from almost $56.2 billion in 2015 to over $76.3 billion in 2016. For, the increase in investment during 2016 at least pushed up private equity s share of total GPD, up to 0.23% of 2016 s just under $5 trillion GDP, from 2015 s 0.08%. saw movement in the opposite direction, with private equity investment falling to just 0.51% of 2016 s over $1.4 trillion total GDP, versus 1.16% in 2015. III
FUNDRAISING Fundraising fever FIG 3.1 North Asia - New Funds Raised in Private Equity saw a very strong fundraising year in 2016, with the previous year s $3.628 billion up to almost $5.9 billion, a 62.6% rise., in contrast, showed a fall of almost 50%, but this is no surprise given that 2015 saw such an exceptionally high figure: $17.72 billion. The 2016 total of almost $9 billion was still higher than s historic norms, and still substantially above s total. represented some 18.5% of Asia Pacific s private equity fundraising in 2015; by 2016 this was down to 7.8%., meanwhile, saw 2015 s 3.8% rise to 5.1%. s largest fundraising by capital raised in 2016 was the JAFCO SV5 Investment Enterprise Partnership, which closed at JPY 75 billion. Second largest was the Industrial Solutions Fund II mezzanine vehicle, with JPY 50 billion raised by year end against its JPY 200 billion target. Third largest was Tokio Marine Capital s TMCAP2016 Investment Partnership, with JPY 51.7 billion raised against its JPY 50 billion target. s largest raise by capital amount was the MBK Partners IV fund, which cleared its $4 billion target with $4.1 billion raised. Second largest was the IMM Rose Gold Private Equity Fund III, with Won 1.25 trillion raised against its Won 1.2 trillion target. And third largest was VIG Partners Fund III, which passed its Won 650 billion target with Won 690 billion raised. These three last-named n funds were also the largest raises of 2016 by target size. In, the Industrial Solutions Fund II was s largest vehicle by IV
INVESTMENTS Immense investment FIG 4.1 North Asia - Private Equity Investments Made The year 2016 certainly was s year for private equity investments. From just over $3.58 billion invested in 2015, the Rising Sun rose on over $11.1 billion of investment in 2016, an over 210% increase., meanwhile, saw a decline in value of almost 55.5%, with almost $16 billion invested in 2015 falling to just over $7.1 billion in 2016. Buyouts extended their lead as s primary investment stage in 2016, rising from $2.3 billion or 64.4% of deal value in 2015, from 59 deals, 20 disclosed, to almost $8.72 billion or 78.4% of value, from 79 deals, 28 disclosed. PIPE financing, the second most important investment stage, rose from just over $300 million or 8.4% deal value in 2015, with 12 deals, all disclosed, to almost $1.1 billion, or 9.7% of value, in 2016, from 15 deals, all disclosed. Expansion and growth capital deals, meanwhile, rose from $428.5 million in value or 12% of the total in 2015, from 324 deals, 250 disclosed, to $838.3 million, or 7.5% of value, from 326 deals, 250 disclosed. V