HKVCA Golf Day 2016
The HKVCA’s 13th annual Golf Day was held on Friday, March 4th, 2016. The event was a tremendous success with close to 60 enthusiastic golfers teeing off for the full 18 holes at the Hong Kong Golf Club in Fanling. With perfect weather bringing blue skies and a sunny day, the golfers were also able to enjoy a delicious lunch and the opportunity to network with their peers after completing their rounds. We would like to thank most sincerely our generous sponsors, specifically our Platinum Sponsors Citi and Morgan Stanley; Gold Sponsors Ernst & Young, MUFG, Lexington Partners; our Breakfast Sponsor, Aon; and our Wine Sponsor, BlackPine. Last but not least, we would like to thank the Association’s Golf Committee and all the participants for their continued support and contributions that helped make this special event possible.        
More photos can be viewed here.         
Team Winners       
Varun Bery   
Sunil Chandiramani   
Ravi Mehrotra   
Vikram Malhotra       
Team 1st Runner-up    
Brad Wargo    
Andrew Ross   
Scott Campbell   
Chris Choi      
Team 2nd Runner-up    
Christopher Laskowski 
Paulus Mok  
David Biller   
Adam Goern    
Longest Drive:   
Nearest the Pin:   
Individual Net Winner:   
Individual Gross Winner:   
James Redmayne   
Vikram Malhorta   
Chris Choi   
Paul Andersson    
Robert Petty
Managing Partner & Co-Founder,
Clearwater Capital Partners

The Art of Contrarian Investing
Robert Petty of Clearwater Capital Partners counts on one sure thing and that is the constancy of uncertainty    
Robert Petty is the Co-founder and Managing Partner of Clearwater Capital Partners. Since founding the firm in 2001, Petty and his co-founder Amit Gupta have used their backgrounds in credit-oriented investment strategies to invest across cycles, sectors and geographies, building an Asia-focused business that is now one of the largest credit-investing firms in the region.    
In an interview with the Hong Kong Venture Capital and Private Equity Association, Petty said he was proud to run Clearwater’s entire business from Hong Kong. “My partner and fellow co-founder and I both live and work in Hong Kong so we love this city. It’s the world’s most efficient business city.    
“The other thing that is fascinating about Hong Kong is that people from all across the world come through this city and we have the ability to engage with them. So it enables a multicultural, cross section of teams. Our team here, for example, is made up not just of Hong Kongers because we are in an environment that welcomes people from all nations to integrate. So it’s a very international city.”    
In terms of credit-oriented investing, Petty said that opportunities in the credit markets of Asia outside Japan are being driven both by regional economic growth and pressure on financial institutions to reduce the percentage of non-performing loans on their balance sheets. These factors make for uniquely difficult and interesting times for credit and debt investors, he added.   
“We have been doing this for 15 years and the one thing that is constant is volatility, the constancy of uncertainty. Stable and steady is not the constant in Asia. But in environments like this, investing on a contrarian basis, when people don’t like the markets, is exactly when you should step in,” he said.    
“We invest across Asia, not just India and China. But two to three years ago no one liked India. Nobody wanted to invest in it but that was exactly the time when it was right to step in – you have to think contrarian. Today we are taking some of our chips off the table in India, having had three large and successful investments, and conversely investing more now into China. Everybody sees the issues in China, and we should be cautious. But 6.9% growth in 2015 is a good thing. Slower growth is a good thing in China. We need to keep this 11 trillion dollar economy at a growth rate that is manageable. Getting to modestly lower growth in the coming years is a good step.”     
Outside of the regional economic giants, Petty sees three opportunities for firms like Clearwater: first, direct lending; second, helping banks with stressed assets; and third, the public market space. The latter is particularly appealing right now, he said. “Public market pricing can be compelling for some companies in stress where it’s possible to buy in at 50 cents to the dollar. Entry price is a big mitigator whether in the equity or credit world.    
“With respect to the opportunities we see in the direct lending space, where many banks have pulled back, private credit is really the only alternative. You can cut deals and structure deals that are interesting. We haven’t yet seen the workout or non-performing loans world in a compelling disposition mode. Perhaps it will take another quarter or for some institutions a further year for the writedown to hit an acceptable level and banks to sell. But it is coming – we have begun to see it.”    
While Petty sees pockets of opportunities in particular geographies – India and China, for example – he is quick to emphasize the importance of thinking in terms of industries. “We certainly think geographically but I would say we really think industry and sector first, as sector changes have ramifications that can play out in any geography: for example, the commodity downturn and its ripple effects regardless of geography, or the Pan Asia energy grid creating coal opportunities in Australia and selling opportunities in Indonesia.”    
Another development Petty watches closely is financial institutions. “In particular, non-bank lending platforms, as providers of alternative capital, can be compelling businesses as banks slow lending growth and retrench overall. The trends of non-bank lending that we have seen in the US and Europe are only just beginning to occur across markets in Asia ex-Japan. Furthermore, financial technology or fintech – its rapid evolution and implementation across the finance industry – is changing access to capital by enabling alternative lending platforms from peer-to-peer to corporate lenders to now run world class systems, and most importantly, roll out better and more efficient risk management systems” Petty said.   
“If we’re talking about peer-to-peer lending platforms, we have looked at a number of them. They are great businesses and will change the consumer lending cost proposition, which matters in the consumer world. But in the corporate world we see other platforms developing. I will simply say there is room for both. We are corporate lenders but fintech in reality is going to have a greater impact on the consumer world.”     

Upcoming Events


Date:   18 March, 2016 (Fri)     
Time: 14:15 - 18:30 followed by cocktail reception
Venue:     KPMG Office, 23/F Hysan Place,
Causeway Bay, Hong Kong
Fee: HKVCA Member: HK$800  
Non-member: HK$1,800  
CPT: 3.5 points
View all speakers here

Limited seats available
Speakers:   Patrick Yip, Tax Partner, Deloitte China
Candy Chan, Tax Principal, Tax & 
Business Advisory Services, Deloitte China
Date: 21 March, 2016 (Mon)
Time: 12:30-14:00
Venue: Deloitte Touche Tohmatsu, 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 per person
Non Member: HK$400 per person
CPT: 1.5 points

  HKVCA Full Members Event

Sponsored by
Speaker: Greg Hallahan,
Managing Director, Global Risk and Investigations Practice, FTI Consulting
Date: 21 April, 2016 (Thur)
Time: 12:30-14:00
Venue: Level 22, The Center, 99 Queens Road Central,
Central, Hong Kong
Fee: Full Member (Corporate): one free pass per company
Associate Member/ Full Member (additional pass):
HK$200 per person
Non Member: HK$400 per person
CPT: 1.5 points

HKVCA Luncheon Talk: Outbound Investments into Europe
Chiomenti Studio Legale (Italy)
Cuatrecasas Goncalves Pereira (Spain & Portugal)
Gide (France)
Gleiss Lutz (Germany)
William Hay, General Counsel, Baring Private Equity Asia
Speakers:   Antonio Tavella, Partner, Chiomenti Studio Legale
Pedro Amat Méndez, Partner,
Cuatrecasas Goncalves Pereira
Antoine de la Gatinais, Partner, Gide
Michael Burian, Partner, Gleiss Lutz
Date: 29 April, 2016 (Fri)
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 (Corporate): one free pass per company
Associate Member/ Full Member (additional pass):
HK$450 per person
Non Member: HK$800 per person
CPT: 1 point

The 15th HKVCA China Private Equity Summit 2016
30 May, 2016 (Mon)
9:00 - 17:15
N201, Hong Kong Convention and Exhibition Centre
(New Wing)
Early Bird Rate (Payment before 8 April, 2016)
Full Member (Corporate): one free pass per company
Associate Member/ Full Member (additional pass):
HK$3,100 per person
Non Member: HK$5,100
6.5 points


View CPES 2015 highlights here.


HKVCA Supporting Events:

APAC Innovation Summit 2016  
7-8 April 2016   

SVCA SE Asia Private Equity Conference
15 April 2016

China Healthcare Investment Roundtable 2016
15 April 2016

SuperReturn China 2016
18-20 April 2016

IFC’s 18th Annual Global Private Equity Conference in association with EMPEA
9-12 May 2016   

Belt and Road Summit 2016
18 May 2016    

AVPN Conference 2016
23-25 May 2016  


New Members Welcome 


Corporate Full Members       
ADV Partners Limited
ADV Partners is an Asian private equity firm, formed to pursue privately negotiated, value investment opportunities within the mid-market corporate segment in Asia. The firm was established in early 2013 by three founding partners with a common vision to build an institutional quality investment platform that combined their diverse yet complementary experience with timely and localized decision making.     

Hillhouse Capital Management Limited             
Hillhouse Capital Group (Hillhouse) is a leading investment management firm founded by Mr. Zhang Lei in 2005. The Group manages capital for institutional clients such as university endowments, foundations, sovereign wealth funds, pensions and family offices. Hillhouse is a long-term fundamental equity investor with a global mandate. Independent, fundamental and proprietary research is key to the investment process. The team focuses on the consumer, TMT, industrials and healthcare sectors and invests in companies across all equity stages.    
Prostar Capital     

Prostar Capital is a private equity firm established to invest across the mid-market energy value chain in the Asia-Pacific region. Prostar manages more than US$600 million in capital commitments. The firm invests in operating companies, projects and assets that are focused on midstream, storage and downstream energy infrastructure.    
Hong Kong Cyberport Management Company Limited    
Cyberport is a creative digital cluster with over 660 community members. It is managed by Hong Kong Cyberport Management Company Limited which is wholly owned by the Hong Kong SAR Government. With a vision to establish itself as a leading information and communications technology (ICT) hub in the Asia-Pacific region, Cyberport is committed to facilitating the local economy by nurturing ICT industry start-ups and entrepreneurs, driving collaboration to pool resources and create business opportunities, and accelerating ICT adoption through strategic initiatives and partnerships. Equipped with an array of state-of-the-art ICT facilities and a cutting-edge broadband network.     
Huatai Principal Investment Group Limited             
Huatai Principal Investment Group Limited (hereinafter referred to as “Huatai Hong Kong”) is a wholly-owned subsidiary of Huatai Securities Company Limited (“Huatai China”) from mainland China. Huatai Hong Kong lawfully registered in Hong Kong Special Administrative Region since 2006. Meanwhile, Huatai Hong Kong is set up with related approval from the China National Securities Supervision and Management Committee (CSRC). Huatai Hong Kong primarily engages in various securities business. It is supervised by Hong Kong securities and futures commission.      

Samena Capital Hong Kong Limited  
Samena Capital is a principal investment group, which invests across multiple asset classes including private equity and corporate credit within the Subcontinent, Asia, Middle East and North Africa (the SAMENA region). It has US$745m of assets under management, committed by a unique shareholder and investor network consisting of prominent business families and entrepreneurs across the SAMENA region.

SMC Capital China               
SMC Capital China (SMC) is a dedicated China private equity GP. SMC has been committed to building and growing its platform based in China since 2002. It is focused on China's dynamic and rapidly growing consumer sector and cross-border consumer opportunities, especially as they relate to the female consumer and associated "she-economy".       
Corporate Associate Members 

BDA Partners    
BDA Partners is an investment banking firm that advises on international mergers and acquisitions, private capital raisings, valuations and financial restructurings. We specialize in cross-border transactions involving Asia with enterprise values up to US$1bn. We have a strong track record advising North American, European, and Asian firms on cross-border transactions. We have professional staff throughout 10 offices located in Asia, the US, and Europe.    
China Insights Consultancy Limited 
China Insights Consultancy (CIC) is an investment consulting company which has been committed to connecting enterprises with capital through our leading knowledge platform. Our team has assisted hundreds of Chinese companies in their initial public offering on HKEx and overseas stock markets. With a pool of over 50,000 experts, covering a wide range of industries, including agriculture, financial services, consumer goods, information technology, automotive, transport & logistics, energy & power system, environment & building technologies, healthcare, metals & mining, chemicals & materials, electronics technology and industrial automation. 

Egon Zehnder International Ltd       
Egon Zehnder is the world’s leading privately held executive search and talent management consultancy with more than 400 consultants in 69 offices across 41 countries. The firm provides senior-level executive search, board search and advisory, CEO succession, family business advisory, as well as leadership assessment and development of the world's most respected organizations. Egon Zehnder’s clients range from the largest corporations to emerging growth companies, family and private-equity controlled entities, government and regulatory bodies, and major educational and cultural organizations. 
MUFG Fund Services (Hong Kong) Limited         
MUFG Investor Services provides asset servicing solutions to clients globally. Leveraging the financial and intellectual capital of MUFG – one of the largest banks in the world with $2.4 trillion in assets – we provide clients access to a range of leading solutions from fund administration, custody, foreign exchange, trustee services, and depository to securities lending and other banking services. MUFG has 90 years of custody experience, 350 years of banking history and has run a global securities lending program for 20 years. MUFG provides administration services for 2,300 funds with $266bn in assets under administration across all investment strategies, asset types and fund structures.           
Recent Events Report

HKVCA ESG Luncheon Talk 
22 February 2016 
A brownbag luncheon talk was held on 22 February 2016. Speakers from Pantheon Ventures, PwC and United Nations supported principles for responsible investment (UN-PRI). The event was hosted at PwC Central, Hong Kong office. With private equity firms increasingly open to the opportunities presented by environmental, social and governance (ESG) investing, experts shared their extensive and valuable experiences and best practices in how they approach ESG. They also offered innovative ideas from a business point of view about how companies are increasingly changing the way they engage with their stakeholders as they recognize that many customers now factor ESG and corporate responsibility practices into their purchasing decisions. We would like to express our sincere thanks to our extremely knowledgeable speakers and a special thanks to our sponsor, PwC, whose support made the event possible.    
Industry News  

AID Partners to sell stake in HMV’s Asia operations to Japan’s World Innovation Lab         
4 March, 2016    

(DealStreetAsia by Ishita Russell) - Hong Kong-based private-equity firm AID Partners is ready to partially exit HMV‘s Hong Kong and Singapore businesses, which it had acquired in 2013. It has agreed to sell 18.37 per cent stake in the business to Japan-based World Innovation Lab for $9 million.

As per the agreement, the Japanese investment firm will acquire 2,250 new ordinary shares in the capital of the HMV Group’s Asian operations.

According to a stock exchange filing, the proceeds from the stake sale would be used for the general working capital of the HMV Group.  It also said World Innovation Lab specialised in investment in, among others, technology and media sectors, and its introduction as a partner would help in the strategic development and promotion of the businesses of the movie and music retailer by bringing in international network and business experience.

Under the agreement, AID Partners will sell shares in HMV’s Asia portfolio – which is operated under an entity of HMV Marketing – to WiL Fund I, an investment fund managed by World Innovation Lab. Upon completion of the deal, AID Partners will still own 81.63 per cent of the business.
View full article here  

Centaline founder Shih invests in P2P diamond exchange           
15 February 2016    

(Hong Kong Economic Journal) - Centaline Property Agency founder Shih Wing- Ching has poured more than $10 million into a peer-to peer diamon exchange that aims to capitalize on the trading of second-hand diamonds, the Hong Kong Economic Journal reported Monday.    
Shih's AM730 Startup Fund, which was set up about four years ago to support new businesses, has invested in the P2P diamond exchange recently, according to the report.    

View full article here  
PVH Corp. and Apax Partners Announce Agreement for PVH to Acquire the Remaining Interests in the Tommy Hilfiger China Joint Venture       
5 February 2016    
(Press Release) - PVH Corp. [NYSE: PVH] and funds advised by Apax Partners announced today that they have entered into a definitive agreement for PVH to acquire the 55% interest in TH Asia Ltd., their joint venture for Tommy Hilfiger in China, that PVH did not already own. The purchase price for the transaction is approximately $172 million, net of cash of approximately $100 million, subject to adjustment. The closing, which is subject to customary closing conditions and regulatory approvals, is expected to occur early in the second quarter of 2016 and is expected to be slightly accretive to PVH’s 2016 earnings on a non-GAAP basis         
View full article here   


EQT Mid Market Invests in Elevate
1 February 2016    

(Press Release) - The EQT Mid Market Fund (“EQT Mid Market”) has acquired a majority stake in ELEVATE (the “Company”). The existing management team of ELEVATE, under the leadership of Co-Founder and CEO Mr. Ian Spaulding, will continue to drive the growth and development of the Company.  
ELEVATE is one of the world’s leading social compliance assessment and improvement service provider operating in the rapidly growing market for supply chain sustainability and risk management services. With operations in over 30 countries, the Company works with sourcing, procurement, and compliance executives from major US and European companies by providing services to build, implement, and operate effective strategic supplier responsibility programs.   

View full article here   



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