Alternatives news roundup: PE firms circling Toshiba; Asia SWFs targeting US housing
GLOBAL
Canadian pension plans and Asian sovereign wealth funds are increasingly targeting the US single-family home rental market as more Americans flock to the suburbs for larger spaces.
In January, Canada’s Public Sector Pension Investment Board said it would invest in a $700 million rental-home venture through a partnership with Pretium Partners. Last month, German insurer Allianz SE announced a $300 million investment in a venture with American homebuilder Lennar to convert houses and townhomes into rentals.
And Singapore’s GIC plans to invest in single-family rental homes across the southeastern US, the Wall Street Journal reported, citing people familiar with the matter.
Source: The Real Deal
CHINA
China’s Citic Private Equity (CPE) aims to raise $3 billion in a new dollar-denominated fund and has reached a first-close of $1.8 billion, according to a person familiar with the company. CPE is planning to complete the fundraising by year-end, said the person, who declined to be named.
After the first-close, which happened during the week of April 5 according to the source, CPE can now start deploying capital from the new fund while investors can continue to commit funds to it.
Some of the firm’s existing investors, including Singaporean state investors GIC and Temasek, re-upped their commitments to the new fund, said the person.
Source: Reuters
Luckin Coffee said it has secured a $260 million investment from two Chinese private-equity firms, funding that the troubled coffee chain operator said would support its debt restructuring and help pay a US regulatory penalty over allegations it fabricated sales to make its growth appear stronger.
The investment is led by Centurium Capital, a Luckin shareholder, which has agreed to invest $240 million in senior convertible preferred shares, Luckin said. Fellow shareholder Joy Capital has agreed to invest $10 million.
Source: Wall Street Journal
US-headquartered private equity company KKR has invested in Adopt A Cow, a fast-growing, direct-to-consumer dairy company in China that integrates digital solutions into its core operations. Adopt A Cow’s new funding round, which was for an undisclosed sum and stake in the company, was co-led by KKR and DCP Capital.
Founded in 2016, Adopt A Cow primarily produces and sells its pure milk, yogurt, cheese sticks and milk power products and has quickly become a trusted high-end dairy brand in China. Over the past five years, the company has become one of the fastest growing direct-to-consumer brands in China, and has accumulated more than 10 million loyal customers.
Source: KKR press release, Private Equity Wire
INDIA
However, when compared with the preceding December quarter's total of $18.5 billion, the investments have declined by 55%. At $1.8 billion, e-commerce recorded the highest quarterly value of investments in the sector in the past five quarters, said the report.
There were 22 large deals during the March quarter, through which Indian companies garnered $4.8 billion, it said, adding that the same was lower than the immediately preceding December 2020 quarter's $16 billion in investment through 30 such deals.
Three private equity houses are said to be circling troubled technology company Toshiba, which is operating in a state of "civil war" that has led to the departure of chief executive Nobuaki Kurumatani. CVC made an initial $20 billion takeover bid, and has been joined by potentially competing bids from KKR and Brookfield.
The company is particularly vulnerable due to a 2015 accounting scandal that led it to be delisted from the main Tokyo bourse. As a result it lacks the major passive investors that would typically side with management, while it has several activist shareholders.
The potential bidding war comes as several private equity houses are targeting Japan. The way this contest is handled will send signals as to whether Tokyo is really serious about corporate governance reform and attracting foreign capital.
Source: Financial Times
KOREA
Manulife Investment Management and Samsung Asset Management signed a memorandum of understanding on Thursday April 8 to cooperate on private asset investments.
The agreement is intended to allow Samsung Asset Management, with W290 trillion ($256.5 billion) in assets under management, to explore opportunities in overseas alternative investing, private assets and specialized public market strategies.via Manulife's private asset strategies.
Source: Korea Herald
Korea's burgeoning co-investment market has reached maturity enough to offer attractive opportunities for investors, US-based investment firm Adams Street Partners said on April 15.
“In Korea, we see attractive co-investment opportunities as it is a sizeable economy with high trade linkages,” wrote noted Dave Brett, partner and head of co-investments at Adams Street Partners. “We see co-investment opportunities not only in traditional leveraged buyout transactions but also in growth deals leveraging healthcare research and development, e-commerce and social media.”
Moreover, favorable tax treatment for non-Korean private equity firms and increasing deals due to active corporate carve-outs among chaebol-owned companies offer attractive valuations, growth rates and risk profiles in Korea, in line with other Asian countries.
Source: Korea Herald
SINGAPORE
Singapore sovereign wealth fund GIC and Hong Kong-listed real estate platform ESR Cayman are to acquire an Australian property portfolio for A$3.8 billion ($2.9 billion) with funds managed by Blackstone.
Bidco, a 20:80 venture between ESR Cayman and GIC, will enter into unit sale agreements with the Blackstone funds for the acquisition of the property portfolio, which comprises 45 industrial and logistics real estate assets in Australia.
Source: Straits Times
AIA established AIA VCC, a variable capital company in Singapore as part of its group wide investment programme to better deploy capital internationally, particularly into alternative and specialist strategies.
The new VCC will be managed by AIA Investment Management Private (AIAIM), a group established in 2016 that had reported assets under management of S$178 billion at the end of last year.
Source: Private Equity Wire
TE Asia Healthcare Partners, backed by private equity firm TPG Capital, expects to achieve a valuation of $1 billion in five years, and plans to invest $90 million mainly in Malaysia and Indonesia this year, building new cardiac hospitals and repurposing an existing medical facility in Kuala Lumpur into an orthopedic center, CEO Eng Aik Meng said in an interview.
That would take TE Asia’s total investment to $260 million by the end of this year, he added.
The health care firm plans to double that investment in the next three to five years as it seeks to set foot in more countries and offers a broader range of specialized medical services, Eng said. “If we continue at this pace, this is easily a $1 billion company” in five years, he said.
Real estate investment sales rose 25.8% in the first quarter of this year, posting a year-on-year increase of 47.9% to S$3.8 billion ($2.86 billion). The figure excludes mergers and government land sales. This was mainly led by the commercial and industrial property segments, including a number of major deals such as a half-stake sold in the OUE Bayfront for S$634 million.
Source: Straits Times
Empea, the industry association for private capital investment in Africa, Asia, CEE, Latin America and the Middle East, launched its new Singapore-based Asia headquarters. The organisation will use the new headquarters to effectively represent the leading fund and institutional investors based in Southeast Asia, using Singapore as a key nexus.
It will be led by senior advisor Steve Okun, who has worked for Empea in Singapore since 2017. He will lead dedicated Southeast Asia research focused on investment data and market trends and collaborate closely with Empea’s Asia Council, which will convene in Singapore annually.
He is joined by Asia research director Ethan Koh, has joined with over a decade of industry experience, including roles at Partners Group and PEI Media
Source: Private Equity Wire
THAILAND
A private-equity fund backed by Thailand’s Chiaravanont family, among others, is likely to acquire a residential development in Bangkok following the close of a maiden fund worth US$120 million.
Founded by Schwin Chiaravanont and Kris Panijpan, 9 Basil is the Southeast Asia-focused investment arm of Bangkok-based Blueprint Forest, and is targeting the residential development, a distressed asset, in its initial foray into real estate. The acquisition underlines the difficult conditions facing property developers in Thailand, particularly in Bangkok, after an overreliance on foreign demand led to a boom in construction.
The Covid-19 pandemic has dented both foreign and local demand, and the inventory of flats and landed houses has increased, rising from more than 138,000 units in 2015 to about 176,000 at the end of 2019, according to Savills Thailand. At the end of the first half this year, it stood at about 147,000 units.
INTERNATIONAL
Canada Pension Plan Investment Board (CPPIB) is to take a controlling stake in India’s SB Energy Holdings and exploring bringing these solar assets under a so-called infrastructure investment trust (Invit). Similar to real estate investment trusts (Reits), Invits allow investors to earn dividends from stakes in infrastructure.
CPPIB in 2019 partnered Piramal Enterprises to co-sponsor India’s first renewable energy-focused infrastructure investment trust Invit. In February, the Ministry of Finance announced the launch of government-sponsored power and highway Invits as part of wider measures to crowd in foreign investment into Indian infrastructure.
Source: Mint
Netherlands based APG Asset Management has acquired a 20% stake in OneAsia for an undisclosed amount. OneAsia, a Hong Kong-based data centre company, will also form a new partnership with APG, it said on Friday (April 16).
While OneAsia has so far operated data centres in Hong Kong and Greater China, it said the partnership would "escalate the momentum of its footprint extension and its diversified reach further into North and South East Asia through a pipeline of opportunities in China, Japan, Korea and Thailand".
Source: OneAsia press release; DealStreetAsia
The Washington State Investment Board will commit as much as $250 million to Blackstone’s second pan-Asian fund.
Blackstone Capital Companions Asia II (BCP Asia II) has target of $6 billion and can invest in large-scale takeovers of development corporations in Australia, China, India, Japan, Korea and Southeast Asia.
Source: DealStreetAsia; Investing News Wire