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Auda this World
As CEO of Auda International, Dr. Ernest Boles discusses why Hong Kong remains a great place for a business to have an office and Auda’s growth ambitions in Asia.
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Dr. Ernest Boles
CEO
Auda International |
As an early pioneer in the private equity industry, Auda International is a specialized, privately held firm investing in private equity via primary funds-of-funds, secondary funds-of-funds and direct co-investment funds, either through its own funds or on behalf of separate managed accounts.
Founded in 1989 as an investment company of the Harald Quandt family, Auda now has offices in Frankfurt, New York, London, Hong Kong and Shanghai and employs approximately 70 people. Its sister company, Real Estate Capital Partners, was also established in 1989 and focuses on real estate investments in the United States.
Given that one of the most profitable investments in Asia of late has been real estate, does Auda have a plan to raise real estate funds for Asia?
“It is something the shareholders have thought about recently, expanding the group’s real estate capability to other regions,” Boles said. “Definitely, the potential is there to think strategically about expanding the group’s alternative investment activities into Asian real estate investments.”
Auda opened its second Asian office in Shanghai in May 2014 and has been on a hiring spree, adding a senior secondary professional to the Asia-based team. The region accounts for about 10 percent of the firm’s global allocation, which is not an unusual percentage in terms of the strategic asset allocation of its LP base, according to Boles.
“Of the roughly 10-15 percent allocated to emerging markets, most of that is to Asia. So our position in Asia reflects the asset allocation that we currently have. In time that will likely increase, although there may be limits in terms of how much capital will be allocated to the region given the fact that many of our investors are asking us to allocate for them globally, as their global advisor,” he said.
Hong Kong was Auda’s first office in Asia and opened in 2007. The firm had been investing in Asia since 1997 and took the decision to establish a presence in China’s global financial centre because senior management felt the firm needed to be local.
“We hired a local team and are executing on that strategy. The benefit of being based in Hong Kong is its proximity, it being central in the region, an easy destination for travel and to meet for business, and for travel into the different regions where we are allocating capital. At least for the foreseeable future it will be our main office in Asia, though we have recently expanded into Shanghai as our second office in Asia Pacific,” he said.
“From an investor perspective, particularly those investors who may be interested in allocating capital to the U.S. and European markets, our Shanghai office is intended to increase our proximity locally to the Chinese market. We are also looking at Japan and South Korea. We do not have specific plans yet to open offices there but I can see that as a possibility depending on how the business develops,” he said.
As for the future, Boles added that the firm planned to maintain and further expand its strong investment team while focusing on allocating capital to the region. “But as we are in specific countries doing due diligence on GPs or looking at specific investments, we will also use the opportunity to engage with the LP community,” he concluded.
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Event Report - China Private Equity Summit 2015 |
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Highlights Video of CPES 2015
The 14th China Private Equity Summit, organized by the Hong Kong Venture Capital and Private Equity Association was held on 1 June, 2015. Attracting more than 430 venture capital and private equity practitioners, leading corporations, and other industry professionals and participants from across the region, the summit discussion focused on the latest developments and trends in the private equity market in China.
Held at the Hong Kong Convention and Exhibition Centre, distinguished guests at this one-day event included: Professor K C Chan, Secretary for Financial Services and the Treasury of Hong Kong SAR Government; Eric Mason, Managing Director, The Church Pension Fund; Joe Lee, Co-founder, KuaiDi Technology Co. Ltd.; and Shuang Chen, Executive Director & Chief Executive Officer, China Everbright Limited
The Summit explored a number of important and timely issues, including cross-border transactions; value creation in private equity investing; RMB funds; the “New Third Board”; China’s draft foreign investment law; the“One Belt, One Road” strategy; and the global ambitions of Chinese companies.
Photo link: View here
Media coverage: Download here |
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Regulatory Update |
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The HKVCA is strongly supportive of – and has been instrumental in the development of – this Amendment, as a positive step to enhance the attractiveness of Hong Kong as a Private Equity hub by simplifying the operating procedures for PE firms based here.
Inland Revenue (Amendment) Bill 2015 (LegCo - Bills Committee)
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Upcoming Events |
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HKVCA Members Event
Sponsored by: 
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Date: |
July 10, 2015 (Fri) |
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Time: |
08:00 - 09:00 |
Venue:
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Victoria Suite, Hong Kong Club, 1 Jackson Road, Central, Hong Kong (Room reserved under the name of Johnny Chan) |
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Fee: |
Full members (corporate): one free pass per company |
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Full members (additional pass)/ Associate members: HK$280 |
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HKVCA Young Professionals Mixer
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Date: |
July16, 2015 (Thur) |
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Time: |
18:30 - 21:00 |
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Venue: |
Racks MDB, 2/F, Winning Centre, M88,
46-48 Wyndham Street, Central, Hong Kong |
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Fee: |
Cash bar |
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Date: |
August 21, 2015 (Fri) |
Time:
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12:00 – 12:30 AGM
(Only Corporate Full members and Individual Full members
shall be entitled to vote.)
12:30 – 14:00 Luncheon |
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Venue:
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The China Club, 14/F, Old Bank of China, 1 Bank Street,
Central, Hong Kong |
Fee:
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Full members (corporate): one free pass per company
Full members (additional pass)/Associate Members/
Overseas members and Individual Full members : HK$450
(Lunch included) |
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SEC Inspections and Enforcement and Volcker Rule Update
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Lessons from current US Securities and Exchange Commission(SEC) enforcement and examination trends – including the SEC’s interest in fund expenses
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New Volcker Rule “SOTUS” guidance.
Speaker: Lorna Chen, Partner, Shearman & Sterling
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Date: |
August 31, 2015 (Mon) |
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Time: |
12:30 - 14:00 |
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Venue:
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Shearman and Sterling office, 12/F, Gloucester Tower,
The Landmark, 15 Queen's Road Central, Central, Hong Kong |
Fee:
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Full members (corporate): one free pass per company
Full members (additional pass)/Associate members:
HK$200 per person
Non-member: HK$300 per person |
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CPT: |
1.5 points |
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Save the Date
This comprehensive training course is designed for those wishing to increase their knowledge of core fundamentals of private equity and venture capital. The course also refreshes and upgrades the skill set of professionals in the industry.
The modules are led by highly experienced top-tier industry practitioners and experts engaged in years of deal-making, structuring, value-creation in companies and exits. Instructors will draw on real cases to illustrate and share their lessons learnt through trial and error over the years.
The course provides in-depth technical and practical know how on venture capital and private equity.
*Topics include:
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September 25 (Fri) - Early Stage Investment
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September 30 (Wed) - Module 1: PE Basics
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September 30 (Wed) - Module 2: The Investment Decision
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October 13 (Tue) - Module 3: Transaction Documentation
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October 15 (Thu) - Module 4: Post Investment
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October 16 (Fri) - Case Studies: Pacific Coffee and CVC/HKBN
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October 26 (Mon) - Module 5 (Sponsored by KPMG):
LP Universe & Fund Raising and Ecosystem of the Finance Industry
CPT: 3 points per module and 1.5 points per case study
*The above information is subject to change until final confirmation.
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Sponsored by: 
This training session will be led by Blackpeak Group, an Asia-focused strategic advisory firm that has conducted over 750 such IDD investigations. Whether your firm is looking for techniques to improve in-house due diligence competencies or simply better understand the IDD process, this session will discuss:
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The IDD process and what’s needed to get started
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Getting the most out of in-house public records and desktop research
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Key China and Hong Kong databases
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Conducting field investigations and industry interviews
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Case studies
Blackpeak Speakers:
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Jack Clode, Partner, Hong Kong
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Sean Chen, Director, Beijing
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Tom Pellman, Senior Associate, Beijing
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Nancy Ma, Senior Associate, Shanghai
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Date: |
November 16, 2015 (Mon) |
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Time: |
12:30 - 14:00 |
Venue:
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The China Club, 14/F, The Old Bank of China Building,
Bank Street, Central, Hong Kong |
Fee:
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Full members (corporate): one free pass per company
Full members (additional pass)/Associate members:
HK$450 per person
Non-member: HK$800 per person |
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CPT: |
1 point |
_________________________________________________________
Save the Date
Sponsored by:  
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Date: |
November 23, 2015 (Mon) |
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Time: |
18:30 - 20:30 |
Venue:
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Hong Kong Club, 1 Jackson Road, Central, Hong Kong
(Room reserved and hosted by the name of Mr. Marcus Thompson) |
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Save the Date
Sponsored by: 
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Date: |
December 10, 2015 (Thur) |
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Time: |
18:00 - 20:00 |
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Venue: |
The China Club, 15/F, Old Bank of China, 1 Bank Street,
Central, Hong Kong |
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Save the Date
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Date: |
January 19, 2016 (Tue) |
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Time: |
18:30 - 21:30 |
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Venue: |
The Hong Kong Country Club |
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_________________________________________________________
Save the Date
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Date: |
January 20, 2016 (Wed) |
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Time: |
8:30 - 17:30 |
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Venue: |
S421, Hong Kong Convention and Exhibition Centre |
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New Members Welcome
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Full Members
Hendale Capital Limited
Phoenix Property Investors
Founded in 2002 by Samuel Chu and Benjamin Lee, Phoenix focuses on fundamental value-oriented opportunities in first-tier Pan-Asian markets, with an emphasis on Greater China and Japan. Since its inception, Phoenix has raised approximately US$2.0 billion of equity for real estate investment and development opportunities in the residential, retail, office and commercial sectors throughout Asia. Today, our dedicated team of over 70 professionals manage assets on behalf of some of the world's most sophisticated institutional investors. Through our network of local and affiliated offices in Hong Kong, Taipei, Tokyo, Singapore and Shanghai, our total real estate assets managed and / or under management has surpassed US$4.9 billion.
TSI International Group Limited
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Associate Members
Atheneum Partners GmbH
Atheneum is a global knowledge broker, which connects leading investment funds, consulting firms, and corporations with the world’s most renowned experts to empower our clients’ business decisions. Thanks to the Atheneum Expert Network complemented by our custom recruitment, clients can gain the latest and most in-depth insights across more than 7,000 niche market segments and major segments which include Healthcare, Industrials & Transportation, Consumer Goods, Technology Media & Entertainment, Materials & Natural Resources, Energy & Utilities, Financial Services, and Public Policy.
ComplianceAsia Consulting
ComplianceAsia specializes to provide regulatory and compliance consulting services to financial institutions in Asia Pacific. ComplianceAsia was founded in 2003 by Philippa Allen and the principals of ComplianceAsia have over thirty years of legal and compliance experience in Asia Pacific with in-house experience in each major Asian jurisdiction.
International Capital Corporation Limited (ICC)
Based in Hong Kong, International Capital Corporation (ICC) offers a range of financial services to organisations and individuals. We have developed strategic partnerships with more than 10 global financial institutions. Our experienced and knowledgeable team are trained to meet our clients’ specific needs in order to maximise their investment return. ICC’s core services include global asset re-arrangement, family wealth preservation, insurance and corporate consultancy.
Liberty International Underwriters
Part of Liberty Mutual Insurance’s global specialty unit, Liberty International Underwriters (LIU) provides a diverse range of specialty products distributed exclusively through the independent broker network. LIU is a global specialty commercial lines insurance and reinsurance business, and offers core products in casualty, marine, construction, energy, inland marine, directors and officers, fidelity, trade credit, professional liability, aviation, property, surety, and crisis management insurance. LIU’s worldwide operations include 40 offices throughout Asia, Australia, Europe, the Middle East, North America and South America.
SGG Corporate Services (HK)
SGG is a leading multi-jurisdictional provider with a heritage dating back more than a century. We are specializing in Real Estate & Infrastructure, Private Equity, Debt and other Alternative Assets as well as providing the widest range of services to Fund Managers, Multinationals and Private clients. Our services include: Corporate Administration, Global Accounting & Consolidation, Fund Accounting, Transfer Agency, Depositary, Family Office, 3rd party AIFM, Risk Management, Payroll Management, Directorships and Office Renting.
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Recent Events Report
HKVCA Luncheon Talk- Case Study CVC/HKBN: Hong Kong Broadband Network - From MBO to IPO in < 3 years
15 June 2015
An HKVCA Luncheon talk, titled “Hong Kong Broadband Network – From MBO to IPO in < 3 Years”, was held on 15th June, 2015 at the China Club . Alvin Lam, Senior Managing Director from CVC Capital Partners, and LAI Ni Quiaque (NiQ), Head of Talent Engagement and Chief Financial Officer from Hong Kong Broadband Network....
Details
HKVCA-PRI lunchtime workshop: Getting to grips with ESG
12 June 2015
A luncheon workshop was held on June 12, 2015 focusing on the topic of ESG in private equity. Held at the China Club, more than 30 HKVCA members were in attendance. The panel discussion members included James Pearson, CEO of Pacific Risk Advisors, who presented a case study on ESG integration in practice....
Details
HKVCA Members Breakfast Meeting
5 June 2015
Our monthly breakfast meeting, held at the Hong Kong Club on Friday, 5 June, was again oversubscribed with more than 60 members in attendance. This successful monthly event would not have been possible without the one sponsorship of KPMG to whom we would like to extend our thanks for helping make this great networking event possible for our members.
Industry News
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Warburg-Backed Red Star Raises US$931 Million in Hong Kong IPO
Friday, June 19, 2015
(WSJ by Prudence Ho and Yvonne Lee) - Chinese home-improvement mall operator Red Star Macalline Group Corp., backed by private-equity firm Warburg Pincus, has raised US$931 million in an initial public offering in Hong Kong.
The offering continues Hong Kong’s strong run as an IPO venue thanks to a stock-market boom. So far this year, Hong Kong ranks second globally as a venue for IPOs by value, behind Shanghai and ahead of New York, according to data from Dealogic.
View full article here
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Morgan Stanley Bets on Alibaba-Backed Insurer
Friday, June 19, 2015
(WSJ by Rick Carew) - A consortium including Morgan Stanley invested $934 million in China’s first online-only insurer, which is backed by Alibaba Group Holding Ltd.’s financial-services affiliate, valuing the venture at $8 billion.
Zhong An Online P&C Insurance Co., a property and casualty insurer that is less than two years old, raised funds from a clutch of other China-focused private-equity investors in addition to Morgan Stanley. They include China International Capital Corp., CDH Investments, Keywise Capital Management and SAIF Partners, the company said in a statement sent to The Wall Street Journal. The investment has been approved by China’s insurance regulator, it said.
View full article here
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Medical-device maker Lumenis to be sold to Hong Kong's XIO for $510 million
Thursday, June 18, 2015
(Haaretz Daily by Dror Reich) - Israel's Lumenis, which makes equipment for surgical, ophthalmology and aesthetic applications, said Thursday it was being sold to the Hong Kong investment company XIO Group for $510 million.
The sale comes just less than a year-and-a-half after the company returned to the stock market after a 10-year hiatus and marks another step in the deepening business relations between Israel and China.
XIO agreed to buy Lumenis at $14 a share, a 16% premium over the company's $12.08 closing price on the Nasdaq Wednesday. In pre-market trading, Lumenis shares shot up to $13.65, nearly closing the gap.
If competed, it will the largest buyout of an Israeli tech companies this year, beating out the $450 million Pitney Bows’ paid for Borderfree and the $433 million Francisco Partners paid for ClickSoftware.
View full article here
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CLSA closes third Asia fund at $1b, beats $850m target
Tuesday, June 16, 2015
(Dealstreetasia by Joji Thomas Philip) - Fudo Capital, the real estate investment arm of Hong Kong-based private equity firm, CLSA Capital Partners, has closed its third fund at its hard cap of $1 billion, according to an SEC filing.
The latest vehicle – Fudo Capital III – was launched in early 2014, and had seen its first close in March last year at $385 million, followed by another close in June at around $537 million, and it had neared two-thirds of $1 billion target by November 2014. The final close at $1 billion is higher than its initial target of $850 million for Fudo Capital III.
CLSA Capital Partners had closed its second vehicle at $815 in 2009, against a target of $750 million. The assets of its second vehicle include the Hongjia Tower in Shanghai and the Laguna Plaza shopping centre in Hong Kong. Similarly Fudo Capital I had raised $430 million in 2005 against a target of $350 million.
View full article here
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