Hong Kong Venture Capital Forum 2015

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Highlight Video - HKVCF 2015

   
The second annual Hong Kong Venture Capital Forum (HKVCF), organized by the Hong Kong Venture Capital and Private Equity Association (HKVCA), was held on Friday, March 13, 2015. Hosted at KPMG’s splendid conference rooms at Hysan Place, the Forum proved to be an overwhelming success with more than 200 industry professionals in attendance at the jam-packed half-day event.

The theme of this year’s Forum was “Future Technologies and Hong Kong” and the event featured a series of three expert panels discussing the impact and increasingly important role that both Hong Kong and the Mainland play as promoters and creators of innovation in the fin-tech, med-tech and internet of things (IoT) ecosystems.

The Forum was opened by the Hon. Gregory KL So, Secretary for Commerce and Economic Development for the Hong Kong SAR Government. Following the keynote addressed by Jun Wang, Managing Partner at Fosun Kinzon Capital, a lively panel discussion was held on the specific opportunities for growth within fin-tech. The panel consisted of Lawrence Chu, Co-founder and Managing Director, BlackPine Zheng He Capital Management; Melissa Guzy, Managing Partner, Arbor Ventures; Chris Dark, President International, C2FO; Zhengyu Wang, PhD, Founder and CEO, China Rapid Finance; Barry Freeman, Co-founder and CFO, Jimubox; and Simon Loong, CEO, Welab.
 
The second panel featured a discussion on the latest investment trends in medical technology and featured a host of well-known sector experts: Andrew Teoh, Founding Partner, Ameba Capital; Jeremy Fearnley, Head of M&A, KPMG Corporate Finance; Judith Li, Principal, Lilly Asia Ventures; Paul Berriman, Group Chief Technology Officer, PCCW-HKT, and Nisa Leung, Managing Partner, Qiming Ventures. Much of the panel’s discussion centered around the importance of the Mainland market, both as consumers of med-tech and, increasingly, as technology innovators.     

The final panel of the afternoon was on the IoT and featured a lively discussion by panel members James Savage, Partner, Venture Investment Team, Headland Capital Partners; Steve Monaghan, Regional Director, Head of Edge, AIA; Rocky Lee, Asia Managing Partner and Head of Greater China Corporate Practice, Cadwalader, Wickersham & Taft; Marcin Dudar, Chief Technology Officer, Creedon Technologies; Tony Kwan, Director, Intel Capital; and Julie Ke, Vice President, Sequoia Capital China. Among the issues the panel pursued was a discussion on which devices would prove to be key in supporting the proliferation of the IoT and what technical and regulatory hurdles likely stood in the way of the sector’s evolution.

The mini “Demo-Day” session that was held immediately after the panel discussions was followed with great interest by Forum participants, with excellent presentations from a variety of local start-ups.

The Forum ended with a reception hosted by our sponsor KPMG and allowed all participants - investors, advisors and entrepreneurs – an invaluable opportunity for networking.

The HKVCA would like to thank our panelists for their tremendous contribution to this year’s event. We would also like to extend our heartfelt appreciation to our sponsors - KPMG, Cadwalader and the Poseidon Group – who helped make the HKVCF a resounding success. 

 

 
Interview topic

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In a conversation with the HKVCA, Gabriel Li discusses the positive outlook for private equity and venture capital in Asia and why Hong Kong continues to represent the best place for firms to headquarter their regional businesses

Asia Trending Upward

The 5th Asia Private Equity Forum (APEF), organized by the Hong Kong Venture Capital and Private Equity Association (HKVCA), was held at the Hong Kong Convention and Exhibition Centre on 21 January 2105 and featured 64 speakers and panelists from all corners of the region.

Among the notable industry experts who spoke at the event was opening keynote Gabriel Li, Managing Partner and Investment Committee Member, Orchid Asia Group (OAG). Li addressed the state of private markets in China in his speech and, in a subsequent interview held during the Forum, shared with the HKVCA his views on private equity and its growth trajectory in Hong Kong.

“Hong Kong makes a lot of sense as the regional headquarters of any private equity firm and the reason is simple: about half of all the capital that has come into Asia has gone into mainland China, the largest economy in the Asian region. Hong Kong is a part of China, it is on the doorstep of China, it has the best services support ecosystem in the region and it is closest to the investment market. So it makes sense for us as practitioners to base our headquarters in Hong Kong,” he said.

Sound logic but what about accessing other markets in Asia Pacific? The member states of ASEAN, for example?  South Asia and Australasia? According to Li, many regional private equity firms have offices in multiple countries. “I am not saying that for a pan-Asian fund it should have only one office and it should be in Hong Kong. It makes sense to have multiple offices across several countries for a pan-Asian fund. But in terms of basic support services and in tax and in accounting, Hong Kong has some of the best qualified professionals and services firms in the region, which allows us to better support our LPs,” he said.

In terms of trends, this year’s APEF reflected both the increasing growth and interest in Asian private equity. Attendance at the event was up significantly and several speakers noted that encouragingly, the pace of distributions was catching up with the industry’s rate of growth and positive performances.

“In 2009, a bad year, there was roughly US$19 billion returned to investors. In 2014, for Asian private equity we expect close to three times that, US$60 billion, to have been returned to investors. This trend is expected to continue because of recent large IPOs in the US, in the tech space, and especially related to China with the listing of Alibaba and other successful companies. I expect both the return and the liquidity to continue to improve,”  Li said.

He also highlighted the growth of trade sales to strategic buyers in Asia and cited the investments of large US medical companies such as Medtronics and Stryker.

“They are buying entire companies in Asia and China, many of which have been funded by venture capital and private equity firms over the past five to 10 years. High valuations have not directly impacted our private equity business in China mainly because we invest in earlier stage growth capital companies. Many of their valuations are reasonable in terms of the metrics, and because of the recent relatively weak performance in public markets the valuations in private equity markets have come down somewhat,”  Li concluded.

Highlight Video - APEF 2015

 

Upcoming Events

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Mezzanine in China- In search for yield in an imperfect world

Sponsored by:   

  • Mezzanine financing in China: onshore and offshore markets
  • Constructing the return and security package: typical structures and return profile in onshore and offshore markets
  • Trends and opportunities

Speakers:
Yonghong Sun, Managing Director, Hony Capital                            
Ince Pan, Director, Hony Capital

Full speaker's bio can be downloaded here.

Date: March 30, 2015 (Mon)
Time: 12:30 - 14:00
Venue:      
     
The China Club, 14/F, The Old Bank of China Building, 
Bank Street, Central, Hong Kong
CPT: 1 point

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Sponsored by:   
 

Date: April 10, 2015 (Fri)  
Time: 08:00 - 09:00
Venue:      
       
Victoria Suite, Hong Kong Club, 1 Jackson Road, Central, HK 
(Room reserved under the name of Mr. Johnny Chan)
Fee: Full Member (Corporate): one free pass per company
       Full Member (Additional pass)/ Associate Member: HK$280
Members only event 

   
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New Rules on Indirect Transfers of Assets:
How it may impact PE/VC Business?

  • Applicable scope of the bulletin
  • Reporting obligations on transaction parties
  • Newly introduced safe harbor rule on internal group restructuring, trading of public securities and treaty protected sellers
  • Black list transaction criteria
  • General assessment of taxability criteria
  • Respective penalties and interest on both buyer and seller for noncompliance
  • Case sharing

Speakers:
Dr Danny Po, Asia-Pacific and China National M&A Tax Leader, Deloitte China
William Lee, Tax Director, Deloitte China


Full speaker's bio can be downloaded here.

Date: April 13, 2015 (Mon)
Time: 12:30 - 14:00
Venue:
               
Deloitte Touche Tohmatsu, 35/F One Pacific Place,
88 Queensway, Hong Kong
Fee:  
 
    
Full Member: one free pass per company
Full Member (additional pass)/Associate Member: HK$200
Non-member: HK$300 per person
CPT: 1 point

   

   

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HKVCA Young Professionals Mixer

Date: April 16, 2015 (Thur)
Time: 18:30 - 21:00
Venue:          HAVANA BAR, 4/F, The Plaza, 21 D’Aguilar Street, Lan Kwai Fong, Central, Hong Kong
Fee:   Cash bar

   

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Getting private equity deals done in Indonesia

Sponsored by:   

  • Foreign ownership rules
  • Investment structures (including commentary on those structures
    currently used in the market)
  • Tax
  • Enforceability
  • Exits

Speakers:
Joel Hogarth, Partner, Ashurst
Ratih Nawagsari (Ipop), Managing Partner, Oentoeng Suria & Partners
Atik Susanto, Partner, Oentoeng Suria & Partners
Mark Davies, Partner, Ashurst
Mark Stanbridge, Partner, Ashurst
Chin Yeoh, Senior Associate, Ashurst

Full speaker's bio can be downloaded here.

Date: April 21, 2015 (Tue)
Time: 12:30 - 14:00
Venue:       
     
Ashurst HK Office, 11/F Jardine House, 1 Connaught Place,
Central, HK
Fee:  
 
    
Full Member: one free pass per company
Full Member (additional pass)/Associate Member: HK$200
Non-member: HK$300 per person
CPT: 1 point

   

   

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Date: April 24, 2015 (Fri)
Time:
    
Check in and breakfast: 07:15 
Shotgun Start: 08:15 
Venue:     
        
The Hong Kong Golf Club (Fanling), 
No. 1 Fan Kam Road, Sheung Shui, New Territories     
Fee*:      

        
 
HKVCA member: $2,900
Non-member: $3,700

*Fee inclusive of golf cart, light breakfast and lunch

               

   


 
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Protecting Brand and Reputation During a Crisis

Sponsored by:   
        

  • The importance of handling communications well during times of crisis
  • Practical tips on effective preparedness and contingency planning prior to a crisis taking place
  • Insight on how to most effectively handle communications should a crisis actually occur
  • Case studies to provide guidance on how to communicate with various stakeholders, help maintain credibility, and minimise potential damage to reputation during times of crisis  

  
Speaker:
Cara O’Brien, Senior Managing Director, FTI Consulting 

Full speaker's bio can be downloaded here.

Date: May 11, 2015 (Mon)
Time: 12:30 - 14:00
Venue:        
     
The China Club, 14/F, The Old Bank of China Building, 
Bank Street, Central, Hong Kong
Fee:
  
  
Full Member: one free pass per company
Full Member (additional pass)/Associate Member: HK$450
Non-member: HK$800 per person
CPT:  1 point

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Sponsored by:          

    

Date: May 18, 2015 (Mon)
Time:  18:30 - 20:30
Venue:        
    
Hong Kong Club, 1 Jackson Road, Central, Hong Kong
(Room reserved and hosted by the name of Mr. Marcus Thompson)
Fee:  
   
Full/Associate Member: HK$450 per person
Non-Member: HK$900 per person

   

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Date: June 1, 2015 (Mon)
Time: 09:00 - 17:30  followed by cocktail reception
Venue:        N201, Hong Kong Convention and Exhibition Centre  
Fee:
  
  
 
  
Early-bird Rate (Deadline: 30 April 2015)
- Full Member or Limited Partners: one free pass per company
- Full Member/Limited Partners (additional pass) or 
  Associate or Overseas Member: HK$2,800
- Non-member: HK$4,800 per person
CPT: 6.5 points

             

Platinum Sponsors:
 

            

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Gold Sponsors: Lanyard Sponsor:
     
     
      
    
Cocktail Sponsor:
   
         

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Other Supporting Events:

Mines and Money Hong Kong 2015
23-27 March 2015

  

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New Members Welcome

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Full Members

Bull Capital Partners Ltd

Bull Capital Partners make direct investments in the Greater China region, primarily in high-growth, scalable, market-leading companies with a particular emphasis on the consumption/retail and services, high-end manufacturing, technology and environment-related sectors. Bull Capital Partners manages the Peregrine Greater China Capital Appreciation Fund, L.P. and Bull Capital China Growth Fund II, L.P. Bull Capital Partners has USD 400 million of assets under management. Headquartered in Hong Kong, Bull Capital Partners has offices in Hong Kong and Shanghai.

Capital Dynamics

Capital Dynamics is an independent, global asset manager, investing in private equity and clean energy infra-structure. We are client-focused, tailoring solutions to meet investor requirements. We manage investments through a broad range of products and opportunities,  including separate account solutions, investment funds and structured private equity products.

The Longreach Group Limited

The Longreach Group is an established independent private equity firm with offices in Hong Kong and Tokyo. The firm focuses on buyouts in Japan and Greater China in the consumer related, mature industrial and technology, financial services, and business services sectors. The firm manages two funds with approximately US$1.4 billion of committed limited partner and co-investment capital, and has a strong track record of portfolio company value creation and realizations.

VMS Investment Group

VMS is a leading multi-strategies investment group of companies with businesses covering proprietary investments, asset management, structured finance, securities brokerage, and corporate finance advisory. VMS makes/advises on investments in private equities, pre-IPO investments, private investments in public equities, special situation investments, equity acquisitions of controlling interests, collateralized loans, bonds, and risk arbitrage. VMS has a diversified portfolio of investments in listed and unlisted entities in metals, oil, renewable energies, real estate properties, chemicals, media, and logistics.  

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Overseas Full Member
    

Japan Industrial Partners, Inc.

Japan Industrial Partners is a Tokyo-based private equity firm that invests in private equity deals across a broad range of sectors, including industrial and manufacturing, technology services, consumer products, and services. Our major investment strategy is to pursue investment returns through investments in the non-core businesses of major Japanese industrial companies with unrealized growth potential in the global market.

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Associate Member

Akin Gump Strauss Hauer & Feld LLP

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Industry News

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HK moves closer to profits tax exemption for offshore PE funds
March 23, 2015 (Mon)

(EJ Insight by Myssie You) - Hong Kong has taken a step forward in strengthening its position as a key private-equity (PE) hub in the region.

On Friday, the government gazetted the Inland Revenue (Amendment) Bill 2015 that seeks to extend to PE funds the profits tax exemption that is granted for offshore funds.

John Levack, chairman of the technical committee at Hong Kong Venture Capital and Private Equity Association (HKVCA), welcomed the move, saying that the administration is on the right track in promoting the PE industry.

“Hong Kong is adjusting its treatment of investment funds, as other fund hubs have done, to remain competitive in an attractive part of fund management sector,” Levack told EJ Insight.

Hong Kong has become a major hub for PE players in Asia, with the city’s efficient capital markets, deep professional talent and proximity to mainland China driving the growth in recent years."

View full article here

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Miller Gold Launches the World’s First Venture Capital Firm Focused 100% on Fitness Technology
March 20, 2015 (Fri)

(Press Release) - Miller Gold, a venture capital firm located in San Francisco and Hong Kong and founded by fitness and technology industry veteran Jonathan C. Miller, launches the world’s first venture capital firm focused exclusively on fitness technology.


A large percentage of the world’s population is overweight or obese, and this trend is growing. It is obvious that current approaches to fitness, weight loss and management are not working. Miller Gold, partnered and funded by the leaders in the fitness industry, is forging innovation in the fitness industry with fitness technology. 

View full article here

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HK court upholds CVC asset freeze over South Beauty founder
March 20, 2015 (Fri)

(AVCJ - Tim Burroughs) - A Hong Kong court has supported a move by CVC Capital Partners to freeze the assets of Lan Zhang, founder of Chinese restaurant chain South Beauty, which was bought by the private equity firm last year.

CVC is said to have paid around $300 million for a majority stake in South Beauty, with Zhang remaining a shareholder in the business and continuing to participate in strategic decisions. However, revenue has reportedly fallen dramatically since the acquisition.

View full article here

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Hong Kong’s GoWell gets $1M funding from Fresco Capital and Nest
March 17, 2015 (Tue)

(TechinAsia by Josh Horwitz) - GoWell, a Hong Kong-based education company, has announced it has received US$1 million in funding led by hometown VC firm Fresco Capital, with participation from Nest Investments.

Founded in 2003, GoWell originated as a company making language-learning tools for Chinese speakers studying English, and English speakers studying Chinese. It then sold its online programs to schools, governments, and businesses.


View full article here

  


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