Alternatives news roundup: Warburg Pincus to help form China distressed house; Record Asia PE propels M&A
AUSTRALIA
An Australasian consortium acquired a 49% stake in the largest network of mobile tower sites in Asia. The consortium includes sovereign wealth fund Future Fund, Sunsuper, the Commonwealth Superannuation Corporation (CSC) and Morrison & Co.
Telstra will retain a 51% holding in the Telstra InfraCo Towers, which owns and operates 8,200 tower assets including 5,500 mobile that support critical digital infrastructure throughout Australia.
The transaction values the business at A$5.9billion.
Source: Future Fund
QSuper, IFM Investors and Global Infrastructure Management have announced a A$22.26 billion takeover bid for Sydney Airport. The bid was offered at A$8.25 per share, which is equivalent to a 42% premium on the last closing price.
As part of the bid, UniSuper, which holds 15% of Sydney Airport's securities, is expected to reinvest its equity interest in the consortium's holding vehicle.
The Sydney Airport board has commenced an assessment of the proposed offer.
Source: BBC, Financial Standard
CHINA
Warburg Pincus is teaming up with Wensheng, one of China's largest special situation fund managers, to create a Chinese asset management firm that will invest in distressed real estate opportunities. The two intend to commit up to $600 million initially, and aim to corral $5 billion in assets in five years.
The new company will be called Wensheng Special Situations Asset Management, the firms announced in a joint statement on Monday (July 5). Warburg is tapping into a growing sector of distressed asset investment as more Chinese property companies feel the strain from tighter liquidity and policy curbs. High debt levels and a government deleveraging drive are pushing more developers to sell assets.
Source: South China Morning Post
INDIA
During the first six months of 2021, private equity and venture capital investments in India grew 33% year-on-year, with the first half of this year notching up $27.1 billion across 442 deals. That compared to $20.4 billion across 433 deals during the same period last year, data from research firm Venture Intelligence showed.
A large sum of private equity investments were directed at IT & ITeS and healthcare. Plus, 16 unicorns were created in the first half, compared to just three during the first six months of 2020.
Source: Times of India
JAPAN
Japan’s $230 billion Pension Fund Association for Local Government Officials, or Chikyoren, hired Barings and Mitsui Real Estate Investment Advisors to manage allocations to overseas private debt and domestic real estate, respectively.
Barings Japan will serve as an advisor while its Irish affiliate, Barings International Fund Managers (Ireland), will serve as a subadvisor for the private debt allocation. Similarly, Daiwa Fund Consulting will serve as an advisor for the domestic real estate allocation, while Mitsui Real Estate will serve as the subadvisor.
Source: DealStreetAsia; Chikyoren
Savills Investment Management of the UK and Singapore’s TE Capital each announced deals on June 30 that together total $278 million of Japanese apartment acquisitions. Savills IM completed $210 million in rental housing acquisitions in June on behalf of its Savills IM Japan Residential Fund II, the affiliate of the London-based property services firm said in a Wednesday press release.
The 10 assets acquired are in popular submarkets of central and outer Tokyo, central Osaka and central Nagoya.
The fund previously acquired four Tokyo assets, located in the highly sought-after districts of Yoyogi-Uehara, Ikebukuro and Ikejiriohashi, in April and May, Savills IM said. With this latest set of acquisitions, Savills IM has now acquired or committed to purchase 27 properties for its first open-ended core residential fund in Asia, with 24 of those assets in Greater Tokyo.
KOREA
The National Pension Service (NPS) acquired an office tower in Australia, Melbourne Quarter Tower, from Lendlease, for a sum believed to be A$1.2 billion ($900 million), Lendlease announced on July 1.
The building is the largest and last commercial office building in Lendlease’s A$3 billion Melbourne Quarter precinct. Lendlease Funds Management will manage the asset on behalf of the Korean institution. Medibank, one of Australia’s largest private health insurers, will be the anchor tenant of the premium-grade tower.
Source: Lendlease; IPE Real Assets
Korea Venture Investment Corporation (KVIC), a Korea government-backed fund of funds, approved a capital commitment of $37.5 million to five venture funds from the Asia Pacific and Middle East and North Africa (MENA)region.
The five VC firms that secured a commitment from KVIC are China’s Northern Light VC, which received $10million; Southeast Asia’s Vertex Venture Management ($15 million), Cento Ventures ($6 million) and Do Ventures ($5 million); and MENA-focused Shorooq Partners ($1.5 million), according to a disclosure by the Korean firm.
Source: DealStreetAsia
South Koreans’ preference for nonfinancial assets such as real estate is still high compared to other major economies, but their investment in stocks has increased during the pandemic, data showed on Monday (July 5).
As of end-2019, the proportion of financial assets in the wealth of Koreans was 35.6%, significantly lower than those in the US (71.9%), Japan (62.1%), UK (54.8%) and Australia (43%), according to data compiled by Korea Financial Investment Association.
Reliance on nonfinancial assets by Koreans stood at 64.4%, followed by Australians with 57%. Americans and Japanese held 28.1% and 37.9%, respectively, of their assets in nonfinancial properties, the data showed.
Source: Korea Herald
SINGAPORE
Singapore state investor Temasek signed a term sheet to lead a $100 million funding round in Indian challenger bank Open, according to sources familiar with the matter.
“Temasek has been finalised as the lead investor… others are still negotiating the deal with the company, which is expected to be finalised in a month’s time,” they said. Like other challenger or “neobanks”, Open operates online but has no physical existence.
In April, Temasek’s peer GIC led a $160 million Series E financing in Indian fintech startup Razorpay alongside Sequoia Capital India.
Source: DealStreetAsia
Temasek led a $30 million Series B funding round in Silicon Valley-based green cement company Fortera, alongside US venture capital firm Khosla Ventures. Fortera’s carbon mineralisation technology converts carbon dioxide into a ready-for-use cement that lowers cement production emissions by 60%.
The state investment company has stated a goal to halve the net carbon emissions of its portfolio by 2030 and achieve net zero carbon emissions by 2050.
Fortera said the new funding would be used to roll out its technology and for product adoption.
Source: PR Newswire
Singapore sovereign fund GIC will sell its 17.65% stake in Singapore based Hua Qing Holdings (HQH) to Hong Kong property group Sino Land. HQH’s portfolio includes Raffles City Shanghai, a commercial building comprising a prime office tower and a shopping mall.
Sino Land will also acquire a 22.68% stake from Singapore developer CapitaLand, raising its total stake in HQH from 23.53% to 63.86%.
Last week, Capita Land announced it was selling stakes in six of its Raffles City developments in China to Ping An Insurance for $7.2 billion. Canada Pension Plan Investment Board (CPP Investments) also announced it was reducing its stake in the portfolio. The divestment will give CPP Investments net proceeds of approximately C$800 million ($645 million).
Source: DealStreetAsia
SOUTHEAST ASIA
Asian merger and acquisition activity surged to its second-highest level ever for a first half as Southeast Asian and private-equity deals hit records, and bankers expect the strong momentum to be maintained for the rest of the year.
Announced deals involving Asian companies came to $707.7 billion between January and June, 75% higher than the same period a year earlier and not far off the record of $758.6 billion logged in the first half of 2018, Refinitiv data showed.
Southeast Asia deals jumped 83% to a record $124.8 billion driven by blockbuster transactions including ride-hailing giant Grab's $40 billion merger with U.S. special-purpose acquisition company (SPAC) Altimeter Growth Corp
Source: Reuters