This year is shaping up to be a major turning point for Asia’s private equity industry as sentiment for emerging markets sours, generating a new need for capital among regional entrepreneurs.
It comes at a time when many Asian companies are being taken over by a younger generation of families more open to private equity.
Many of these companies are looking to expand, often across border, and require the expertise and connections that general partners (GPs) offer. For GPs with dry powder, 2013 represents one of the best opportunities in years to deploy capital.
“You are going to see a group who have survived, done well and will continue to move ahead and become more successful and bigger,” says Tang Kok-Yew, chairman and managing partner of Hong Kong-based private equity firm Affinity Equity Partners.
In fact, PE strategies are diversifying. For those with scale, the model is Blackstone, which has expanded into areas such as real estate, infrastructure, private debt and hedge funds.
At the same time, the prospects are bright for dedicated funds with a focus on private equity styles, such as buyouts, or single countries and regions. And other PE firms are taking a track record and adapting it to new trends, such as cross-border M&A.
But in today’s low-yield environment, investors are going to be interested in all such strategies, provided they have confidence that their money will be handled by a GP that delivers top-quartile returns over time.
With that in mind, AsianInvestor embarked on a project to identify the 25 most influential people in Asian private equity today, those who are shaping the future of the industry.
Some are veterans and pioneers from the 1990s, others are new players who bring innovation and different ways of doing business.
The full list is published in the forthcoming September edition of AsianInvestor magazine. In the run-up to that issue, we will reveal, in alphabetical order by surname, some of our choices for online readers. These, we hope, will showcase some of the key industry trends to be aware of.
Warren Allderige, managing director and CEO,
Pacific Harbor Group
Warren Allderige spent his early days trading pan-Asian credit – at outposts in Hong Kong, Singapore, Japan and South Korea – and for banks that include Lehman Brothers, where he served as head of the Singapore office. He joined Amroc Investments Asia in 1999 as president. One of two founding shareholders, he advised affiliates Avenue Capital and TPG, plus other notable regional clients on sourcing and transacting investments in Asian distressed debt.
He has been with Hong Kong-based Pacific Harbor Group since 2006, which he co-founded as a Citigroup affiliate with the Amroc Asia team at its core. The firm invests in Asian high yield, special situations debt and participates in the private lending market, becoming an independent entity in 2011.
Today Pacific Harbor has about 30 people across additional offices in Singapore, Tokyo, Bangkok, Manila, Jakarta, Taipei and Mumbai. It has invested about $8 billion since inception. Pacific Harbor’s focus is around private lending as traditional sources of financing are tightening credit lines.
A slowing global economy and forecast interest-rate rises will likely mean that “lending will become more difficult and expensive to secure from international banks”, while domestic lenders are now typically taking longer to approve loan applications. A combination of factors has “sparked higher demand for short-term lending across Asia”, says Allderige. “Hedge funds and private equity firms are among the groups that have increasingly moved into the space, lured by the potential of high returns.”