2020亚洲私募股权投资洞察（英文版）.pdf

Asia Private Equity Insights 2020The Challenging Investment Landscape in Asia2020 Grant Thornton Hong Kong Limited. All rights reserved. 3ForewordPrivate Equity (“PE”) Market OverviewWith economic and geopolitical uncertainties along with slower growth in the global economy, the value of Merger and Acquisition (“M however, the initial deal mutually agreed by the United States and China could lead to new prospects in 2020. On 15 January 2020, both governments signed the first-phase deal and agreed to limit further tariffs, and further discussions for tariff reductions will take place in future trade negotiations. In late 2019, China agreed to increase the purchase of US goods and services over the next two years, which served as a positive sign in boosting the economy in both countries. As a result of the trade dispute, the global economy remained stagnant during the first three quarters of 2019 and its growth rate was at a record low of 3%, which marked the slowest growth since the global financial crisis in 2008. In midst of the outbreak of novel coronavirus, we have yet to see its impact on the global PE market. Nevertheless, data suggested that investors shifted focus towards distressed assets as a new way out of this adverse situation for potentially attractive returns.In Hong Kong, the government has been strengthening its competitiveness in asset and wealth management and attracting investors to its fund industry by multiple approaches, which include streamlining fund licensing procedures, introducing tax exemptions for private funds, and developing mutual access to other financial markets to widen the fund distribution network.At a glance, PE activities in Asia remained weak amid market volatility and an unsettling political climate. The laggard pace of its activities generated US$57.3 billion across 286 deals in the first three quarters of 2019.Asian M the former can purchase valuable assets at a discounted price, and the latter could potentially avoid restructuring or even liquidation, which could lead to distressed deals becoming a significant instrument for growth and expansion Biotechnology New technology, especially biotechnology, will be a great trend to follow in the coming years The global market has an increasing demand for life bioengineering, involving medical treatment and pharmaceutical products. With the accelerated evolution and promotion of new models, the new biological economy is expected to lead human production and life into a new era The Chinese government has made substantial investments in the area of synthetic biology, including the commencement of construction of the third National Synthetic Biotechnology Innovation Center in Tianjin in December 2019Technology, Media and Telecommunications Society is placing more emphasis on the quality of life. In particular, the increasing public usage of social media platforms and streaming services is driving demand for 5G technologies for a better entertainment experience More diversified digital media options also bring better experiences for end-users, which boost market activities for broader and more comprehensive products or services Emerging market in Asia The economic growth and strong customer base in new markets, especially Southeast Asian countries such as Thailand, Vietnam, etc., have attracted investors Southeast Asian markets will serve as an alternative or addition to the current Chinese market In China, the Greater Bay Area development plan and the Belt and Road Initiative demonstrated great opportunities for all countries while global investors still show significant interest in investing in China The Chinese government has adopted an open attitude to welcome foreign investments by allowing operation of foreign-controlled or wholly foreign-owned businesses in more sectors In 2019, China replaced Japan to become the most attractive PE market among Asian investorsInnovation and technology development Increasing attention to distressed funds2020 Grant Thornton Hong Kong Limited. All rights reserved. 6Outlook for the PE Industry in 2020Global PE Firms Possible recession in core markets is the foremost concern for investors in the global market. With a deteriorating economic outlook ahead, more than half of PE investors expect to see an economic downturn in the next 12 months. Furthermore, the recent outbreak of novel coronavirus is expected to have impact on the global economy The damage caused by the US-China trade war has become the second most-expressed concern. The introduction of import and export controls and investment restrictions as well as tariff policies have made it difficult for investors to execute business decisions; therefore, investors might be tempted to hold off new investment plans In 2019, investors were more worried about the extreme market valuations. Concern about market valuations was the third most-expressed concern in 2019 due to the high multiples of global PE transaction valuations during the first 9-month period of 2019Source: PEI - Perspectives 2020Source: PEI - Perspectives 2020WHAT DO RESPONDENTS SEE AS THE GREATEST IMPACT ON THEIR PERSONAL PORTFOLIOS IN THE NEXT 12 MONTHS? Despite both political and economic uncertainties remaining in the market, investors are still optimistic about the future of the global PE market. Some 42% of those surveyed expressed confidence in increasing exposure to PE firms in 2020WHAT IS YOUR EXPOSURE LEVEL TO PE IN THE NEXT YEAR?2020 Grant Thornton Hong Kong Limited. All rights reserved. 7Outlook for the PE Industry in 2020Global PE FirmsSource: PEI - Perspectives 2020Source: PEI - Perspectives 2020 Most investors have decided to maintain their existing allocation amid economic uncertainty and US-China trade war tensions Distressed strategy is the most preferred strategy. 42% of respondents planned to increase their allocation, while 8% expected to decrease their allocation in 2020. Investors believed it would be an opportunity to leverage the possible recession and recoup gains Approximately 28% and 27% of survey respondents sought to increase their allocation to buyout and growth funds respectively The fund of funds strategy is the least appealing PE strategy in 2020, with 34% respondents planning to decrease their allocation Approximately 47% of respondents outperformed their benchmarks in 2019 Over 30% of respondents matched their expectations and 8% of respondents underperformed their benchmarks in 2019HOW DID PE PORTFOLIOS PERFORM AGAINST BENCHMARKS IN 2019?WHAT IS YOUR PLANNED ALLOCATION FOR PE STRATEGIES IN 2020?Economic uncertainty may prove to be an opportune moment for some PEs to invest in companies with great potentials at a lower price.Lloyd LiuPartner of Transaction Advisory Services, China2020 Grant Thornton Hong Kong Limited. All rights reserved. 8Outlook for the PE Industry in 2020Asian PE Firms 63% of Asian respondents thought the Chinese market is the most attractive market, despite the US-China trade war weighing on fundraising as well as the macroeconomic slowdown and a tighter credit environment in the domestic market The Japanese market is also becoming increasingly attractive to PE firms in recent years, with 58% of Asian respondents showing interest Technology was the most popular sector for Asian buyout funds in 2019, with US$16.5 billion recorded in the first three quarters of 2019. This was driven by the new investment opportunities unlocked in the transitioning Chinese economy and the alternative exit channel provided by the Science and Technology Innovation Board at the Shanghai Stock Exchange (“SSE”) Investment in healthcare was also vibrant in Asia, with US$10.4 billion recorded in the first three quarters of 2019Source: Probitas Partners - 2020 Institutional Investors Private Equity SurveySource: Dechert LLP 2020 Global Private Equity OutlookWHICH MARKET DO ASIAN INVESTORS SHOW THE MOST INTEREST IN?WHAT IS THE MOST PREFERRED INDUSTRY FOR ASIAN BUYOUT FUNDS IN Q1-Q3 2019?2020 Grant Thornton Hong Kong Limited. All rights reserved. 9Outlook for the PE Industry in 2020Chinese PE Firms Market overviewSource: Zero2IPO Research 2019 China PE market overview and prospectASSETS UNDER MANAGEMENT IN CHINAS PE MARKETFUNDRAISING IN CHINAS PE MARKETSource: Zero2IPO Research 2019 China PE market overview and prospect The Chinese PE market has been growing steadily since 2009. Assets under management increased from RMB1,995 billion in 2009 to RMB10,817 billion in the first 9 months of 2019. Although the market is expanding, funds were facing difficulties in raising capital during the year, and investors are more cautious on how they invest their capital Investors in the Chinese PE market have a preference for RMB denominated funds over foreign currency denominated funds, and it was noted that over 80% of funds raised were RMB denominated Uncertainties arising from global macroeconomics and the US-China trade war have affected investor sentiment and created general doubts and skepticism about the return on equity, leading to the downward trend in fundraising in Chinas PE market from 2018We expect the sluggish trend in fundraising to continue, given the fact that many Chinese PE investors have been holding back in putting more money in and wanting to wait for recovery of previous investments.Edward FengPartner of Transaction Advisory Services, China2020 Grant Thornton Hong Kong Limited. All rights reserved. 10Outlook for the PE Industry in 2020Chinese PE Firms Market overviewFUNDRAISING IN CHINAS PE MARKET BY FUND TYPE DEAL VALUE BY INDUSTRY IN Q1-Q3 2019Source: Zero2IPO Research 2019 China PE market overview and prospect In the first three quarters of 2019, the Chinese PE market raised approximately RMB831 billion, of which 68% was raised for Growth Funds and 12% for Venture Capital. Investors in the Chinese PE market demonstrated strong interest in early stage investments, which they seek to capture the potential growth and expansion of young businesses Investors were also interested in infrastructure funds and real estate funds, which accounted for 8% and 5% respectively In the first three quarters of 2019, investors displayed confidence in technology-related industries; the majority of buyout deals in the Chinese PE market were in the Internet, Information Technology, Biotechnology and Healthcare industriesSource: Zero2IPO Research 2019 China PE market overview and prospect Support from the government is crucial in the development of new businesses. Biotechnology ranks as the third industry by deal value in Q1-Q3 2019, well supported by the substantial synthetic biology investments by the Chinese government in recent years2020 Grant Thornton Hong Kong Limited. All rights reserved. 11Pre-transaction and Target SearchesKey Challenges Facing PE in 2020We expect that top-notch and well-managed PEs will still manage to raise funds during times of turmoil.Barry TongNational Head and Joint APAC Head of Transaction Advisory ServicesSource: Probitas Partners - 2020 Institutional Investors Private Equity SurveyWHAT ARE LIKELY TO BE THE BIGGEST CONCERNS FOR PE INVESTORS IN 2020? The top concern for 2020 is that investors believe that the current PE market is at its peak, with 64% of respondents regarding it as one of their major concerns. It was the third leading concern for 2019. Investors hesitate to invest in PE if they anticipate a decline in prices in future. Despite this concern, most investors are not looking to decrease exposure since the potential risk-return ratios of PE assets are still very attractive compared to other non-PE asset classes 54% of respondents indicated that there will be too much money used to pursue too few opportunities, which is the second major concern for 2020 and was also the leading concern for 2019. The mismatch between abundant funds and limited opportunities could contribute to inflated and overvalued asset prices 48% of respondents indicated that overly high purchase price multiples in middle-market buyouts could be a major concern in 2020. High purchase price multiples could be the result of the excessive demand for PE investment opportunities, leading to overvalued assets and hindering investors returnsFund managers will face less noise/pressure and be more selective in their portfolio with an enhanced risk management regime. Kevin ChanPartner of Transaction Advisory Services, China