With a dearth of investment opportunities, private equity has become by far the most popular investment alternative trumping even the likes of real estate. With hedge funds struggling to justify returns for the fees they charge, even ultra-high net worth individuals are keen to park funds with private equity.
In such an environment, no wonder new rounds raised by private equity funds have outstripped the total raised just three years ago. It is also in this setting that general partners of these funds face pressure to deploy the funds raised. With cheap credit, it is tempting to justify valuations and bid aggressively for the best targets. We saw that in the recent private equity deals in Hong Kong with multiples achieved in the mid-teens, double of what would have been considered rich pricing a decade ago.
The Asset Triple A Best Private Equity House therefore is not the one that raised a record-size fund in 2016 or the ones that had the most deals closed. It is to the house that amid the intense competition, expensive valuation and pressures to deploy has remained disciplined to strike the best deal at fair valuation and able to exit at multiples that is the envy of peers.
Affinity Equity Partners is this year’s Triple A Best Private Equity House for those reasons. In March 2016, it completed the sale of Loen Entertainment, Korea’s music streaming service, to Kakao Corp in a US$1.5 billion trade sale. For its 30-month investment, Affinity generated 6.7x of its investment capital and an IRR of close to 100%.
In New Zealand, Affinity also engineered the IPO of Tegel Group, a poultry producer, in a rare IPO exit by a private equity fund. While priced at the lower end of the range, it nevertheless performed well in the aftermarket rising by as much as 10% on its opening day listing on the New Zealand and Australian stock exchanges.
The stiff competition for good assets did not prevent Affinity from investing in its four core markets of Korea, Australia, China and Southeast Asia in 2016. Among its acquisitions include a 100% stake in Burger King Korea; Medical Director, Australia’s leading provider of clinical and practice management software and investing in Jinmailang Beverage, a leading beverage company in China with a number market share for bottled water in Hebei province and top-5 share of the ready-to-drink tea nationwide.
For the full list of the winners and nominees of the Triple A Regional Awards 2016 please click here.
Winners of the Triple A Regional Awards will be honored on February 28, 2017 during The Asset’s Regional House & Deal Awards Dinner. For more information about the awards ceremony, please click here.
