Asia, excluding Japan, continued to draw hefty private equity (PE) investment during the first half of 2007 as $3.2 billion (Rs12,800 crore) poured in, mostly from the United States, according to 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 investment during this period. Last year India was the highest funded market in the region with investments valued at over $2 billion. And average deal sizes remained higher in India as compared to China.
PE investors spent an average of $15.2 million per deal in India during the first half of 2007, higher than China’s average deal size of $14.5 million. 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 the first half of this year.
Hong Kong , China and India accounted for 94% of the PE investment during this period. Hong Kong toppled the other two, however, with an average deal size of $37 million (Rs149 crore) although the country saw only 5 deals.
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 past years 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 fundraising for Australia and Malaysia, in particular, was notably large compared to the amount of investment the countries saw in the first half of the year. Australia ranked fourth for PE investment with only $71 million (Rs286 crore) across 26 deals, while Malaysia did not figure among the ranks at all.
The industries favoured by PE investors across Asia, led by financial services, industrial/energy, and consumer related, mirrored the most popular segments in India—a natural consequence of India’s strength in the PE space. Yet, despite China’s dominance, manufacturing deals fell low on the list and composed less than 2% of overall deals.