VC, PE investments in S-E Asia trailing 2017's high base: SVCA

Singapore

SOME US$5.8 billion in investments were made in South-east Asia by venture capital, private equity and corporate venture funds in the first eight months of this year, going by data released by the Singapore Venture Capital & Private Equity Association (SVCA) on Monday.

SVCA noted that the sum is "by no means as significant" as the US$23.5 billion made in total investments last year.

Association chairman Thomas Lanyi told The Business Times that the 2017 private equity numbers were abnormally high because of the US$12 billion GLP privatisation deal done in that year.

He also noted that when comparing total investment figures for the first eight months, the US$5.8 billion for this year marks a 56 per cent increase over the US$3.7 billion sum for 2016. "This would indicate that 2018's investment activity thus far continues on a growth trajectory from 2015."

Of the US$5.8 billion, venture capital investments accounted for US$3.16 billion, surpassing the US$2.7 billion for the whole of 2017.

SVCA said venture capital has "powered ahead", while private equity has dropped from the "dizzying high" in 2017.

Private-equity investments for the first eight months of this year clocked in at US$1.73 billion, compared to US$15.5 billion for the whole of 2017.

Corporate venture capital funds deployed some US$972.7 million for the first eight months of 2018. This was more than the total investment made by such funds in 2014 (US$405.8 million) and 2015 (US$378.8 million), but a far cry from 2017's US$5.31 billion.

On Monday, the SVCA marked its 26th anniversary with awards recognising venture capital and private equity firms that had made "successful and significant" investments and exits in 2017.

Dymon Asia Capital (Singapore) won the "Fund Raised of the Year" award for its fund-raising of the US$450-million Dymon Asia Private Equity (South-east Asia) Fund II.

SVCA said: "Investors were won over by its excellent track record, impressive distribution to paid-in capital, exceptional commitment to participation by Dymon's managers and clearly focused investment strategy."

Insignia Venture Partners bagged the "VC Deal of the Year" award for its investment in Trusty Cars, which owns wholesale car marketplace Carro. SVCA said that Insignia's rapport with Carro's management and "value-add in hiring and follow-on financing" had distinguished it from the other nominees.

The "PE Deal of the Year" award went to Navis Capital Partners for its investment in quality-control company AsiaInspection, while the "PE Exit of the Year" award went to TPG Capital for the sale of its 50 per cent-stake in Myanmar Distillery to ThaiBev for about US$494.4 million.

Dr Lanyi said the role of private equity and venture capital "becomes even more vital" in the face of increasing economic uncertainty and volatile trade conditions globally.

"The South-east Asian story for private equity and venture capital continues to captivate investors due to strong growth stories and business propositions.

"The SVCA Awards recognise these investors who have shrewdly sourced their portfolio companies and those who have added significant material value to their investees."