PEI Awards 2018 Asia-Pacific secondaries: GIC, NewQuest, Eaton take prizes

Asia-Pacific has been referred to as a region that will never account for a meaningful portion of secondaries deal volume.

There are signs this will be disproved. Asia-Pacific accounted for 10 percent of the $74 billion in transaction value last year, according to research by advisor Greenhill, as sister publication Private Equity International‘s 2018 awards show.

Such examples include the yuan to dollar restructuring involving assets managed by Shanghai-based Loyal Valley Capital, backed by buyers including NewQuest Capital Partners and Singapore’s GIC, and stapled tender process on TPG’s 2008-vintage and 2013-vintage funds. The latter process helped TPG raise at least $4.6 billion for its seventh Asia fund, which closed in January.

The winners below are paving the way for Asian secondaries. Expect to see more of this calibre in the year to come.

1. GIC
2. HarbourVest Partners
3. NewQuest Capital Partners

One of the organisations giving traditional secondaries firms a run for their money is Singaporean sovereign wealth fund GIC, whose New York, London and Singapore-based secondaries team is at the forefront of the market’s development. The unit’s highlights last year include backing a yuan to dollar fund restructuring involving Shanghai’s Loyal Valley Capital – a complex deal that set a market precedent – and restructuring two vehicles managed by tech-focused investor Vector Capital. “As a long-term investor, we will continue to leverage our knowledge across multiple asset classes and seek out valuable LP opportunities,” says Yong Cheen Choo, GIC’s chief investment officer, private equity.

1. ICG Strategic Equity, Credit Suisse Private Fund Group for Standard Chartered spinout
2. HarbourVest Partners for Telstra spinout
3. NewQuest, GIC, TR Capital, Siguler Guff and Eaton Partners for Loyal Valley Capital

Good things come to those who wait. This maxim certainly holds true for those involved in the spinout of Standard Chartered’s private equity team. The long-awaited deal involved backing the sale of PE assets on balance sheet and spinning out the emerging markets-focused captive team. The London-headquartered bank announced in 2015 it was reducing its private equity business and executed several secondaries deals with the help of Credit Suisse’s Private Fund Group. ICG’s Strategic Equity team, which has plans to develop existing offices in Hong Kong and Singapore, emerged as the buyer in this circa $1 billion transaction, marking the final step in Standard Chartered’s plans to exit its private equity business.

1. Eaton Partners
2. Credit Suisse Private Fund Group
3. Greenhill

The Asian secondaries market continues full steam ahead with the region accounting for around 10 percent of 2018 global deal volume. Eaton Partners was the brains behind one of last year’s most innovative deals in Asia-Pacific: the yuan to dollar restructuring of a portfolio of assets held by Loyal Valley Capital. The transaction, understood to be the first transaction of its kind, involved stakes in early stage healthcare companies and Chinese “unicorns”. Eaton attracted high quality names to back the deal including Singapore sovereign wealth fund GIC, and the transaction was worth at least $500 million.

1. Kirkland & Ellis
2. Dechert
3. Ropes & Gray

Kirkland & Ellis worked on high-profile secondaries transactions in 2018, with total volume of about $30 billion globally. In Asia, it represented clients in $5.2 billion-worth of secondaries transactions. These deals included three portfolio sales worth $2.1 billion, six GP-led restructurings also worth $2.1 billion, and a $1 billion staple offer. In particular, Kirkland & Ellis represented HarbourVest in connection with the spin-out of the Telstra Ventures franchise. “Kirkland has the largest investment funds practice in Asia and the largest dedicated secondaries investment practice in Asia, which allowed Kirkland to provide best-in-class legal services in 2018 for secondaries market transactions in a number of Asian jurisdictions, including India, China, Hong Kong, Japan and Singapore,” says Michael Belsley, global head of Kirkland’s secondary market practice.