The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
Josephine Price, deputy CEO and managing director, Aria Investment Partners comments: ôThe successful closing of Aria III is a testament to investor confidence in our investment approach. Over the past few years we have invested in well managed, high growth companies providing capital and a lot of value add. We are looking forward to investing Aria III in more market leading companies from Korea across to India.ö
Private equity has provided CLSA with an alternative revenue stream which allows it to leverage its strengths but does not compete with its established broking practice in the region. The diversification has proven timely given the immense interest private equity is witnessing in Asia. Since 2000 CLSA has grown private equity into a lucrative business; in March 2006 it was estimated CLSA had $1.4 billion invested in private equity funds compared to $250 million just a couple of years ago.
CLSA manages four funds focused on distinct and defined themes: the Aria series of funds which are dedicated to growth capital for companies exposed to Asian domestic demand; Fudo Capital ($430 million) investing in Asian property of which approximately half is earmarked for Japan; CLSA Sunrise Capital ($325 million) investing in growth and mid-market buyout opportunities and MezzAsia Capital ($200 million) providing mezzanine debt financing for Asian buyouts.
Price has commented in the past that AsiaÆs emerging tigers China and India offer tremendous opportunities for private equity investments in consumer sectors. Only a few weeks ago CLSA Capital Partners exited an investment in FU JI Food and Catering Services Holdings made in early 2004 from its $100 million Aria Fund II, its first successful exit in China in 2006. It is said to have brought in five times the original investment. In 2004 CLSA also invested $10 million in VLCC, a chain of sliming clinics cum spas in India. Then in September, 2005 CLSA invested Rs637.5 million ($14.5 million) for a 14.2% stake in Apar Industries, an India based producer of specialty oils, aluminium conductors and polymers.
Dealogic recently estimated that in 2006 private equity investors have committed $5.12 billion in Asia ex-Japan compared with $7.99 billion for calendar 2005. The challenge for CLSA and others in this competitive environment is to identify and close deals which meet their investment parameters while providing healthy returns.
Mega players Nippon Life and Dai-ichi Life are looking for opportunities in higher-yield single-A US corporate bonds, which offer more appealing yields than stagnant domestic offerings.
The “lower for longer” monetary policy and stimulus packages, coupled with the rolling out of vaccine programmes favorably support real estate investing in the region, with offices and data centres presenting forward-looking opportunities.
As US fixed income default rates rose and yields fell during the pandemic, are Asian bonds, which have had more stable yields through 2020, looking more attractive?
Insto roundup: Norway's Oil Fund praises China governance efforts; NPS commits $100m to taxi-hailing app
Norway's Oil Fund welcome Chinese proposals improving transparency and shareholder protection; HK's MPF assets surge 35% year on year; Korea's NPS commits $100m to TPG consortium to invest in taxi-hailing app; Poba commits W270bn to European property; Malaysia's EPF sees investment income rise 59% year-on-year in first quarter, and more.