Asia, excluding Japan, continued to draw hefty private equity (PE) investments in the first half of 2007 as $3.2 billion (Rs12,800 crore) poured in mostly from the US, according to the US financial information services provider Thomson Financial’s mid-year Asia-Pacific (excluding Japan) PE review.
China, so far, is ahead of India as the top recipient of private equity (PE) investment during this period. Last year, India was the highest funded market in the region with investments worth more than $2 billion. And average deal sizes remained higher in India compared with China.
PE investors spent an average of $15.2 million (Rs61 crore) per deal in India during the first half of 2007, higher than China’s average deal size of $14.5 million (Rs58.4 crore). Yet, China had a higher deal volume with 103 deals, while India had 90 deals. This trend may strengthen given that China also raised seven times the amount of funds during this first half of the year.
Hong Kong, China and India accounted for 94% of the PE investment during this period. Hong Kong, however, topped the other two with an average deal size of $37 million (Rs149 crore), although the country saw only five deals for this period.
Hong Kong, along with Australia and Malaysia, also saw a spike in fund raising for buyouts. There were no buyout funds, however, raised for the Indian market.
The big buyout allocations for India in the past have come from New York-based Blackstone Group and Washington DC-based Carlyle Group, who have set aside $1 billion each for this market.
PE fund-raising for Australia and Malaysia, in particular, was notably large compared with the amount of investment the countries saw in the first half of the year. But Australia ranked fourth in PE investment with only $71 million (Rs286 crore) across 26 deals, while Malaysia did not figure in the ranking at all.
Led by financial services, industrial/energy, and consumer related industries, mirrored the most popular segments in India—a natural consequence of its strength in the PE space.
Yet, despite China’s dominance, manufacturing deals fell low on the list and comprised less than 2% of overall deals.