The 2008 global crisis left the western economies weakened and struggling. While Asia did not escape unscathed, the repercussions here appeared less serious. The decisive response of the Asian governments in introducing strong economic stimulus packages to spur domestic economies spared it from a major fallout in export sectors. China's economy is expected to grow 8.7% this year and India by 7.4%. As compared to rest of the world, Asia appears the stand out as the stronghold for sustained recovery.
Private Equity is gaining recognition especially in China as the key driver of economic growth rather than as part of the financial funding instruments. The Chinese government is encouraging its growth and accelerating the development of RMB funds to fund economic development. Investments activities are strong as new areas with huge potential begun opening up in areas such as infrastructure, energy, technology, retail, entertainment and other consumer sectors.
This sets the stage as a magnet for inflow of funds into Asia. Movement of funds that used to focus in North America and Europe are now looking east. Formation of new funds is creating a rising wave of activity in the private equity market to take advantage of the many opportunities especially in the sectors identified by the governments to be spearheads for domestic growth.
This is one of the busiest years for HKVCA, in supporting the growth in memberships, in the development of a road map to meet the demands of its members, and in the implementation of new initiatives and programs.
It is clear that the great effort of the Membership Committee continued to bear fruit. Last year members increased from 141 in 2008 to 173, and the momentum continued netting an additional 20 members to 193 as at the end of May 2010. This is the highest level ever for the Association.
Breakfast meeting which begun in October 2008 has now become regular monthly features. It has proven to be a popular mode of casual networking with fellow members and potential members without any formal agenda.
An induction partner programme will be launched to bring new members into the fold through interaction with committee members.
HKVCA had also appointed HK University of Science and Technology R&D Corporation to conduct a survey on the membership needs. We are thankful to all participating members who provided valuable comments through online survey and interviews. It is encouraging to know that in general, members are satisfied with our services offered, but more importantly, the survey greatly helps us to formulate strategies, to provide better services and support to our members.
Membership Committee:
Johnny Chan / Patrick Yeung, Crosby Asset Management (HK) Ltd (Co-Chairman)
William Kerins, Oaktree Capital (HK) Ltd (Co-Chairman)
Michael Scown, Intel Capital Asia Pacific
Yoshiaki Hasegawa, SBI Hong Kong Ltd
Boris Bong Squadron Capital Advisors Ltd |
The Venture Committee continues to take the lead to support the entrepreneurial community.
HKVCA is a founding member of the HK Business Angel Network (HKBAN) formed in early 2010 together with the HK Science and Technology Park and Tolo Harbour Business Angel Support Group. HKBAN successfully created a platform for angel investors to network and source deals. Two pitching sessions have been conducted with around 20 angels, and some projects are undergoing serious discussions.
HKVCA is a member of the HK Science and Technology Part Admission Panel of Incu-Tech Programme. Committee Members namely Johnson Chen, S C Mak, Marvin Lai, Roger Marshall, K O Chia, as well as Johnny Chan and Patricia Chiu represented the Association in 12 half-day sessions during the year. We are grateful for their time as well as contribution of their honorariums to the Association.
Our members also served as regular speakers at various events to share their experience. They also sit on judging panels of Young Entrepreneurs Development Council (YDC) Hong Kong Business Plan Competition 2010.
Their effort and dedication are greatly appreciated.
Venture Committee:
Jeffrey Cheung, Crossgate Advisors Ltd (Co-Chairman)
Marvin Lai (Co-Chairman)
Johnson Chen, Clearbridge Partners Ltd
Roger Marshall, Persimmon Capital Ltd
Patrick Lim, IBC Consulting Company
Simon Mak
Savio Tang
K O Chia, HKVCA (Advisor)
Michael Scown, Intel Capital Asia Pacific (Advisor) |
Besides promoting business related activities, HKVCA ensures that the social activities are not neglected. The key social events are our annual Golf Day and Wine tasting events.
Golf
The Golf Day has become a tradition in HKVCA and for our Golf enthusiasts, a much anticipated and enjoyable annual event. With the loyal support of Ernst and Young, the 7th Annual Golf Day was held at the Fanling Hong Kong Golf Club on March 19, 2010.
Eleven teams competed for the Golf championship on a day which turned out to be a perfect day on a beautiful course. The relaxed and fun atmosphere sets an excellent mood for senior members in the PE industry to network and bond. We are most delighted to have our guest of honor Mr. Fred Ma, former Secretary of Financial and Treasury Bureau and member of International Advisory Council of CIC join us, kicking off the day at first tee.
Added to the fun of playing was the excitement and laughter drawn at the auction where active bidding for stayovers at top hotels, dinner vouchers at gourmet restaurants and high end golf equipment.
Special thanks go to organizing committee members and sponsors.
Golf Committee:
William Kerins, Oaktree Capital (HK) Ltd (Chairman)
Stephen King, Unitas Capital
Kevin Chan, SEAVI Advent Ocean Private Equity Ltd
Sunil Chandiramani, Symphony Investment Management Ltd
Vincent Fan
Varun Bery |
Wine Tasting
Wine Tasting with a difference this year. "Blending your own Bordeaux" was the theme of HKVCA's 6th Wine Tasting event.
Under the instructions and guidance of Hong Kong's leading wine expert, Simon Tam, members attending the workshop blended their own Bordeaux. They explored the relative importance of 3 principle grapes varieties from which classic wines are made - Cabernet Sauvignon, Merlot and Cabernet France.
Participants had fun making their own blend and challenging it against real Bordeaux and against other teams' finished blends.
With Simon leading the group for the 5th year, we can always be sure of a fun and entertaining way of learning and tasting some very fine wines.
This event offered another excellent opportunity for both members to network.
Wine Committee:
Marcus Thompson, HSBC Private Equity (Asia) Ltd
Jason Chan, Mercer (HK) Ltd
Peter Lee |
China Private Equity Summit
The Annual China Private Equity Summit (CPES) has become the signature event of HKVCA. CPES 2010 attracted the strongest turnout of over 300 participants since 2002. Participants were Private Equity practitioners and professionals engaged in the industry, leading global corporates, and business leaders from Hong Kong and overseas. It was also attended by representatives from 10 other venture capital and private equity associations around the region (including Beijing, British, Japan, Korea, Shanghai and Taiwan). The Summit has gained the reputation of being the most important practitioner forum led by those directly on the ground, to track and anticipate market trends and changes, to share knowledge and intelligence on new developments and the key issues that affects the industry.
This year, the major topic was focused on the development of RMB funds and its impact on international players, Government Fund of Funds, regulatory changes for RMB funds, A Share IPOs, alternative listing venues for Chinese firms and Limited Partners (LPs) participation in the growing RMB market. During the Summit, expert speakers also shared their experiences and views on cross border investments, risks and returns. Industrial, healthcare, oil and energy, consumer and real estate were top 5 sectors that attract most PE investments.
A great deal of thought and hard work went into the planning and organizing of the CPES2010. The PRC Committee is congratulated for a very successful event.
PRC Events
Besides the Summit, the Committee also undertook many other functions throughout the year in building relationships with governmental bodies and regional associations of China and Asia, by taking speaker roles and engagements in China. In addition, during the year the Committee worked closely with The Department of Commence of Hebei Province, Shandong Province and Jiangxi Province on co-organizing or supporting Investment Promotion Seminars which were held in Hong Kong. In February 2010, a Memorandum of Understanding was signed with The China Council for the Promotion of International Trade Panyu Branch (CCPIT) for further cooperation in Investment & Financing Promotion between mainland China and Hong Kong. There were also numerous exchanges with various venture capital associations and bodies in China.
We are thankful to all the Committee members for contributing their time and effort in promoting HKVCA in China. It is impossible to fulfill the numerous engagements without the assistance of other members, and in this regard we thank Athene Li of Spring Capital and John Li of Crosby for stepping up to represent HKVCA in speaking at events in Hong Kong and China, and meeting our many China visitors.
PRC Committee:
Conrad Tsang, Baring Private Equity Asia Ltd (Co-Chairman)
Johannes Schoeter, Victoria Capital Ltd (Co-Chairman)
Andy Li, China Agri-Industries Holdings ltd
Richard Cheung, Cinven HK Ltd
Gordon Lam, Citigroup Venture Capital International Asia Ltd
Alvin Ho, Chepstow Capital Advisors Ltd
John Li, Crosby Asset Management (HK) Ltd
S C Mak, HKVCA
Peter Chen, MC Capital Asia (HK) Ltd – Shanghai Representative Office
Vincent Chan / Athene Li, Spring Capital Asia, Ltd
Alice Chow, Squadron Capital Advisors Ltd
Petrina Tam, PricewaterhouseCoopers |
HKVCA continued its course of relationship building with other professional and trade bodies and associations.
The highlight this year is the launch of the Roundtable of Associations. HKVCA invited 10 associations to Hong Kong for a Roundtable on June 8, 2010 with the objective of information exchange and collaboration, for the benefit of our members and the PE community as a whole. This is the first time that VC/PE Associations across countries and continents gathered for a very fruitful and useful exchange. The Associations which came and participated were: Beijing Private Equity Association, British Venture Capital Association, Japan Venture Capital Association, Korea Venture Capital Association, Shanghai Private Equity Association, Shenzhen Venture Capital Association, Singapore Venture Capital Association, Taiwan Venture Capital Association, Taiwan M&A & PE Council.
Besides dialogue between the Asian Associations, Boris Bong, MD of Squadron presented an overview of the Asian PE landscape at the Roundtable. An important part of the day’s discussion was an update of European regulations given by Simon Walker, CEO of BVCA. He was joined by Javier Echarri, Secretary General of EVCA via conference call, with the latter explaining in great detail how the proposed European Directives on PE funds under discussion would affect Asian funds. As the implications can be far reaching and long term, Asian VCs would be approaching their respective governments for support.
In April 2010, a Memorandum of Understanding was signed with Korean Venture Capital Association in Seoul Korea to enhance collaboration between the two entities.
A new Resource Committee was set up with the charter to bring together and leverage the resources of member firms to enrich the services provided by HKVCA covering, but not limited to, the following areas:
- Legal changes in the region
- Accounting rules and trends
- Portfolio management
- HR issues
- Fund services
- Insurance plus others
Since the launch of the service in late 2009, the Committee has sourced over 20 articles from member firms in the Resource Page at the HKVCA website. These included Market Reviews, Updates on Foreign invested Partnerships in China, Reliefs under Double Tax agreements in PRC companies etc.
A job matching corner was also newly created with some good initial responses. Furthermore, special hotel corporate rates were also negotiated.
Resource Committee:
Joseph Wan, Cinven HK Ltd
Gabriel Li / Edmond Wong, Orchid Asia Group Management Ltd
Rupert Chamberlain, KPMG
Thomas Chou, Morrison & Foerster
James Li, Royal Bank of Scotland |
The demand for educational programs continues to be strong. The PE Fundamental course in four modules was again at held at full capacity in February. It was not just an excellent introduction for new entrants and for those in specialized PE areas seeking a broader understanding of the industry, but also a refresher program as speakers drew on their current experiences. The Education Committee, with special thanks to Stephen Wozencroft, had been diligent in improving the course presentations.
In addition, in response to requests from members for more indepth and specific training, we held several well attended Master classes on Valuations,.
Education Committee:
John Levack, Electra Partners Asia (Chairman)
Jessica Jook, Crosby Asset Management (HK) Ltd
Josephine Price, Chepstow Capital Advisors Ltd
Stephen Wozencroft, Arthur Marriott & Associates in association with Dewey & LeBoeuf LLP
Peter Lee |
Following the results of the Membership study undertaken, the Association plans to hold more regular programs. Fees were increased for the first time in $10,000 to $12,000 since 2005 to provide us the needed resources to implement the new initiatives and to raise the profile of the Association.
To cope with increasing activities and programs, we have 2 additional staff since March 2010 - an Events Manager and a China Coordinator.
The industry in Asia is at a critical juncture facing repercussions from US and European governments’ attempts to introduce stringent regulations that would have serious impact on Asian PE funds. Our Association is preparing a letter to the Hong Kong seeking their assistance in making a stance to the European Union.
To be effective voice, we need to have the entire community to stand behind us.
|