 | Jean Salata
Chief Executive Officer and Founding Partner
Baring Private Equity Asia | Finding The Gap Between Bank Funding and Debt Capital
The HKVCA was delighted to feature Jean Salata, Chief Executive Officer and Founding Partner of Baring Private Equity Asia (BPEA), as the Asia Private Equity Forum 2017’s luncheon keynote speaker on 18 January. Salata has lived and worked in Hong Kong since 1989, he is well-placed to talk about the challenges and opportunities of investing in Asia. Since 1997 he has overseen all BPEA’s investment activities as well as its strategic direction and led the firm’s management buyout in 2004.
BPEA is now one of the largest and most established independent alternative asset management firms in Asia and advises funds with more than US$10 billion in committed capital. It has been investing in Asia since it was formed in 1997 and has over 100 institutional investors, which includes sovereign wealth funds, pension funds, endowments, foundations, insurance firms and family offices. It runs a pan-Asian investment program covering private equity, private real estate and private credit, and also invests in the US and Europe in companies seeking to expand to Asia. Notable investments include Nord Anglia, the world’s largest premium international school operator, and Hexaware Technologies, a leading Indian IT services company.
In fact, it is India where Salata is particularly excited about BPEA’s latest developments. “We recently announced that we’re getting into private credit in India. We’ve started a private lending platform there and I think it’s a really interesting space to be in”, he said.
According to sources, the first close of BPEA’s new India-dedicated credit fund of Rs500 crore (US$75 million) is expected in the March quarter. The entry of BPEA into the credit business marks the growing interest of global and domestic private equity funds into private debt, keen to tap the lending space between conventional bank funding and debt capital markets. As Salata said, “we believe that on a risk-adjusted base, the returns you can generate in private credit in India compare favorably to equity returns in that market”.
Real estate is another growth area for BPEA. The firm made its first move into real estate in 2011, bringing together a senior team of investment professionals who had worked together previously investing capital in Asia for the alternative investment divisions of leading global insurance companies. The firm’s real estate fund closed in March 2015 with US$400 million in commitments including co-investment capital, one of the largest first time real estate funds raised by an independently owned manager in Asia.
“Our real estate fund is performing well. We’re very pleased with the way it is progressing”, Salata said. To that end, he was pleased at the lively discussion among participants at APEF 2017’s panel on private equity real estate. Examining the impact on deal flow, pricing and exits of rising US interest rates and fund outflows, the panel also discussed which markets and segments are attractive and which to be wary of, the risk of a real estate bubble in China, and how private equity fund managers are able to win transactions.
“It’s great to see how the HKVCA is broadening into the discussion of real assets at its events,” Salata said. “It’s good that as the industry develops you see more broad-based discussion, which is good for its growth and development.”
Salata is convinced that alternative assets are well-positioned for activity as 2017 rolls out, largely because of uncertainty globally and in Asia. “The political situation in the US has changed with the election of the new president. People are probably going to wait and see what happens over the next few months. But I expect activity to pick up as a result of increasing volatility in public markets. During periods of uncertainty, private equity is generally a more reliable source of funding for companies that need access to capital”, he said.
Celebrating his firm’s 20th anniversary this year, BPEA’s CEO was keen to congratulate the HKVCA on its 30th anniversary. “Thirty years is incredible because our industry has been so volatile over the years, the fact that the Association is still around after three decades is an accomplishment in and of itself. I’m very glad to see how well attended the APEF is each year and how the HKVCA is thriving on the back of the growth of the industry”. he said.
| | HKVCA Annual Golf Day 2017 | | The HKVCA held its Annual Golf Day on Friday, March 3rd, 2017. The event was a tremendous success with perfect weather bringing blue skies and a brilliant sunny day. A record number of golfers teed off at the Hong Kong Golf Club in Fanling and the event itself drew over 90 attendees, including non-golfers. Participants also enjoyed a delicious lunch and a valuable opportunity to network with their peers both on and off the course.
We would like to thank our generous sponsors, specifically our Platinum Sponsors Citi, Morgan Stanley and White & Case; our Gold Sponsors Ernst & Young and Lexington Partners; our Silver Sponsor, Mercedes-Benz; our Watch Sponsor, Oriental Watch Holdings Limited; our Breakfast Sponsor, Aon; and our Wine Sponsor, BlackPine. We would also like to thank the HKVCA’s Golf Committee - Varun Bery, Chin Chou, Bob Partridge, Sunil Chandiramani and Adam Goern - for their support and leadership.
We are especially proud to be able to report that we raised HK$25,000 dollars for the Hong Kong Society for the Protection of Children. Our special thanks to all the participants for their continued support and contributions and the hardworking HKVCA team that helped make this special event possible. | Course Competitions | Winner | | Closest to the Pin – Hole #2 | Martin Crawford | | Closest to the Pin – Hole #8 | David Chan | | Closest to the Pin – Hole #17 | Sunil Chandiramani | | Straightest Drive – Hole #4 | Tim Huang | | 2nd Runners-Up | Anthony Chan
Alex Wu
Adam Goern
Lee Yu Chuan | | 1st Runners-Up | Martin Crawford
Varun Bery
Ravi Mehrotra
Sunil Chandiramani | | Champions | Kirk Beaton
X. D. Yang
James Redmayne
Lee Chul Joo | More photos can be viewed here.
| | _ |  | HKVCA Brownbag Luncheon - Maximizing Post-Deal Value
through Portfolio Operating Model Effectiveness | | Sponsored by |  | | Speakers: | David Chan, Managing Partner, Tax Hong Kong and Macau, | | Head of Transaction Tax Greater China, EY | | Edvard Rinck, Partner,
Operating Model Effectiveness Leader, EY | | Elienne de Vries, Senior Manager,
Operating Model Effectiveness,EY | | View speakers bio here. | | Date: | 23 March, 2017 (Thu) | | Time: | 12:00 - 14:00 | | Venue: | EY Office, 22/F CITIC Tower, | | 1 Tim Mei Avenue, Central, Hong Kong | | Fee*: | Full Member (Corporate): one free pass per company | | Associate Member/ Full Member (additional pass): HK$200 | | Non-member: HK$400 per person | | *Fee inclusive of a light lunch | | CPT: | 2 points | | |  
|  | | HKVCA Young Professionals Mixer | | Sponsored by |  | | Date: | 23 March, 2017 (Thu) | | Time: | 18:30 - 21:00 | | Venue: | Bungalow, Shop 2, G/F The Centrium, 60 Wyndham Street,
Central, Hong Kong | | Format: | Cash bar basis | |
| | HKVCA Brownbag Luncheon - The Latest Trends in Biotechnology
and the Most Effective Way to Commercialize the Academic Projects | | Sponsored by |  | | Speakers: | Prof. Kenneth Lee, Professor and Chief, Stem Cell and | | Regeneration Thematic Research Program, School of Biomedical Sciences, Chinese University of Hong Kong | | Judith Li, Partner, Lilly Asia Ventures | | Anne Lo, Project Manager, Horizons Ventures Limited | | View speakers bio here. | | Date: | 20 April, 2017 (Thu) | | Time: | 12:00 - 14:00 | | Venue: | Deloitte Office, 35/F One Pacific Place, 88 Queensway, Hong Kong | | Fee*: | Full Member (Corporate): one free pass per company | | Associate Member/ Full Member (additional pass): HK$200 | | Non-member: HK$400 per person | | *Fee inclusive of a light lunch | | CPT: | 2 points | | |
|  | | Platinum Sponsors | | | | Cocktail Sponsor | Lanyard Sponsor |  |  | | Date: | 26 May, 2017 (Fri) | | Time: | 9:00 - 17:15 (Followed by a cocktail reception) | | Venue: | N101, Hong Kong Convention and Exhibition Centre (New Wing), | | 1 Expo Drive, Wan Chai, Hong Kong | | | | Fee: | Early bird Rate (Payment deadline: 26 April 2017) | | | | Corporate Full Members (VC/PE firms) | | One FREE pass per company
HK$3,200 HK$4,300 per additional person
HKVCA Associate/Overseas Members
HK$3,200 HK$4,300 per person
| | Non-member Rate
HK$5,200 HK$6,300 per person | | | | CPT: | 6.5 points | | | | Simultaneous interpretation will be provided in English and Mandarin in the main conference room. | |
|  | | Date: | 10 July, 2017 (Mon) | | Time: | 13:30 - 18:30 (Followed by a cocktail reception) | | Venue: | KPMG Office, 23/F Hysan Place, Causeway Bay, Hong Kong |
| | Upcoming HKVCA Events in 2017:
 | HKVCA Supporting Events:
Wine x International Women’s Day: WoW! — Swire Women of Wine Festival
10 March 2017
AVCJ Private Equity and Venture Forum - China
15 – 16 March 2017
China Education Investment Roundtable 2017
28 March 2017
SuperReturn China 2017
24 - 26 April 2017
IFC’s 19th Annual Global Private Equity Conference in association with EMPEA
15 - 18 May 2017
Hong Kong Cross-border Investment Services Mission 2017
23 - 26 May 2017 |
| | . | |
New Members Welcome
Corporate Full Members
Actis
Actis is a leading investor in growth markets across Africa, Asia and Latin America. We deliver consistent, competitive returns, responsibly, through insight gained from trusted relationships, local knowledge and deep sector expertise. Founded in 2004, we have an unparalleled heritage in growth markets, set within a culture of active ownership. We have raised USD$9bn since inception, operating through 13 offices globally.
Golien Ltd.
MizMaa
Overseas Full Members
Business Development Bank of Canada
The Business Development Bank of Canada is a Canadian government owned financial institution offering debt, equity and advisory services to small and medium sized companies in Canada. It is the largest venture capital investor in Canada, with over $2 billion in direct and indirect investments covering Canada, the US and other regions.
Clayton, Dubilier & Rice (Asia), LLC
Clayton, Dubilier & Rice (CD&R) is one of the oldest and most respected private equity firms in the world. Founded in 1978, the firm pioneered the investment model of blending skilled investment judgment and operating skills. CD&R has invested in 70 businesses across a broad range of industries: consumer/retail, healthcare, services and industrials, with an aggregate transaction value of approximately $100 billion.
Corporate Associate Members
Finquest
Finquest is the premier big data and machine-learning platform that caters to Asian mid-market M&A and direct investments. With a unique database of 1,000,000 organizations (institutional investors, M&A advisors and mid-sized companies), predictive algorithm and team of experts, Finquest makes targeted, curated and actionable introductions to its clients whilst maintaining confidentiality throughout the process.
Ipreo
Ipreo is a global leader in providing market intelligence, data and technology solutions to all participants in the global capital markets, including sell-side banks, publicly traded companies and buy-side institutions and investor relations of public companies. Ipreo's private capital markets division provides cloud-based solutions specifically to help private capital market participants take control of investment data. Ipreo is private-equity held by Blackstone and Goldman Sachs Merchant Banking Division, and has more than 1,000 employees supporting clients in every major financial center around the world.
Recent Events Report
HKVCA Family Office Luncheon
23 February 2017
The HKVCA’s Family Office Committee hosted its latest family office only luncheon on 23 February, 2017 at the China Club. K.O. Chia, Chair of the Committee, provided an introduction to the HKVCA as an organization and discussed the Association's initiatives and aims in establishing the Committee. Attendees were then encouraged to join in and share their own experiences and interests, including those of the family offices they are associated with and the types of investments they have an interest in - alternative asset classes, the various sectors of private equity and so forth. Also discussed were which topics attendees might be interested in exploring at future family office gatherings.
The HKVCA and the Family Office Committee were especially pleased that 18 family office representatives were able to find time from their busy schedules to attend the lunch and to network with their colleagues. We would like to thank the Committee and all the participants who helped to make this event a great success.
HKVCA Breakfast Meeting
10 March 2017
The HKVCA's monthly breakfast meeting was held at the Hong Kong Club on Friday, 10 March, 2017. The event was oversubscribed, with over 80 members taking full advantage of the opportunity to network and reconnect with their fellow industry practitioners. This month's breakfast would not have been possible without the sponsorship of I-On Asia to whom we would like to extend our sincere thanks for their continued support and help in making this terrific networking event possible for our members.
Industry News
Sequoia Leads US$30 Million Series B for Klook Travel 2 March 2017
(Press Release) - Klook, Asia's largest attractions, tours, and activities booking platform, today announced it has raised US$30 million in Series B funding led by Sequoia Capital China. Existing investors including Matrix Partners, ex-Tencent executive-backed Welight Capital also participated with follow-on investments. The funds will further Klook's global expansion efforts to offer one-stop booking for travelers to enjoy everything from attractions, tours and activities to local transfers, dining experiences, shopping, etc. Founded in late 2014, Klook's team of investors already includes some of the world's leading venture capitalists.
View full article here Buyout fund enters the fray of Yingde’s boardroom feud with takeover offer 1 March 2017
(SCMP by Eric Ng, Peggy Sito and Ren Wei) - A private equity fund has stepped into the middle of a bitter boardroom tussle at Yingde Gases Group, with a takeover offer to two feuding factions that could start a bidding war for the Chinese industrial gas supplier.
PAG Asia Capital, one of Asia’s largest private equity buyout funds, offered HK$6 per share to Yingde’s three founding shareholders with 41.9 per cent of combined holdings, on the condition that it can eventually own more than 50 per cent of the gas company. View full article here Nominee to be Navy secretary withdraws 27 February 2017
(The Washington Post by Missy Ryan) - The Trump administration’s choice to become the next Navy secretary has pulled his name from consideration, the Pentagon said Sunday, the second nominee to head a military service who has bowed out in recent weeks.
Defense Secretary Jim Mattis announced that Philip Bilden, a private equity fund manager, had withdrawn his name in a decision “driven by privacy concerns and significant challenges he faced in separating himself from his business interests.” View full article here Hong Kong AR player Banuba raises $5m 23 February 2017
(AVCJ by Holden Mann) - Banuba, a Hong Kong-based developer of technologies for augmented reality (AR) mobile applications, has raised $5 million from VP Capital and Larnabel Ventures.
The investment will be used to accelerate development on Banuba’s first mobile app, which is set for release in the first quarter of 2017. Banuba also plans to allow third parties to access its technologies in order to make their own applications.
Banuba develops software to allow smart phones to recognize facial expressions, gestures and objects and apply filters and video effects in real time. The company expects a wide range of developers to find its technology appealing for entertainment, education and communication apps. Founded in Hong Kong last year by Belarusian entrepreneur Vadim Nekhai, Banuba employs more than 30 engineers in Hong Kong and its development office in Belarus. View full article here
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