ASEAN Venture Capital Blog Volume 3: Improving Venture Capital and Private Equity Scorecard for Southeast Asia August 14, 2014 The ASEAN Venture Capital and private equity markets in Southeast Asia are undergoing a rapid evolution and expansion as 2014 provides markedly improved and attractive fundamentals for investors. The broader Asia Pacific region is the second most attractive region for private fund investment (F1). Component to this, Southeast Asia's attractiveness is being driven by (1) Regional heavyweights China and India experience decelerating growth and (2) China is struggling with reduced liquidity for its previously robust IPO market resulting from the restrictions to its share class local currency market 2013. Illustrating this is the leading indicator of foreign direct capital flows. In 2013, total FDI in the combined markets of Singapore, Malaysia, Thailand, Indonesia and Philippines surpassed China for the second time since 1997 (F2).
Figure 1. Regional PE Attractiveness
Figure 2. FDI: China vs ASEAN-5
Return anticipations are also elevated with Asia outpacing the markets that are developed by yield expectations -5 year horizon (F3). The coincides distinctively with a rather large capital base from institutional funds, corporate allocated strategies, and family offices (F4).
Figure 3. PE Earning expectations: Developed PE funds) vs Emerging market
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Figure 4. Unspent fund capital (Asian
About Inspire Ventures Inspire Enterprises is a newly recognized US$25 million venture capital and private equity fund focused on the ASEAN area with a particular emphasis on Malaysia, Thailand, Vietnam, Indonesia, and Myanmar. Ventures' teams in Bangkok and HCM City focus on opportunities beginning and onward. Inspire invests in businesses that carry through proven business models with a strong emphasis on management and localization teams who are astute operators. Figures (F1) Private Equity Trend Report 2014. 2014. Price Waterhouse Coopers. http://www.pwc.lu/en/private-equity/docs/pwc-private-equity-trend-report-2014-anindustry-rediscovering-optimism.pdf (F2) Global Research estimates, CEIC. 2014. Bank of America Merrill Lynch. (F3) Emerging Markets Private Equity Survey 2013. 2013. EMPEA/Coller Capital. (F4) Asia-Pacific Private Equity Report. 2014. Bain. http://www.bain.com/publications/articles/asiapacific-private-equity-report-2014.aspx (F5) 2001-2013 GDP Growth. 2014. Asia Matters for America. http://www.asiamattersforamerica.org/sites/default/files//field/image/ASEAN/NewASEANGr aphics/GDP%20growth.jpg References (1) Asia-Pacific Private Equity Report. 2014. Bain. http://www.bain.com/publications/articles/asia-pacific-private-equity-report-2014.aspx (2) Global Private Equity Report 2014. 2014. Bain. http://resultsbrief.bain.com/pdfs/Bain_and_Company_Global_Private_Equity_Report_2014.p df (3) Optimism High For Asia Pacific Private Equity Exits. 2013. Forbes. http://www.forbes.com/sites/mergermarket/2013/04/24/optimism-high-for-asia-pacificprivate-equity-exits/ (4) Asia-Pacific private equity outlook 2014. 2014. Ernst Young. http://www.ey.com/GL/en/Industries/Private-Equity/Asia-Pacific-private-equity-outlook-2014 (5) Preqin and SVCA Special Report: Singapore and ASEAN Private Equity. 2014. Preqin. https://www.preqin.com/docs/reports/Preqin_SVCA_Special_Report_Singapore_ASEAN_Priv ate_Equity_April_2014.pdf (6) Private Equity-Backed Exits in Q1 2013. 2013. Preqin. https://www.preqin.com/blog/101/6491/pe-exits-q1-2013 (7). Overview of GMS Stock Exchanges. 2014. http://www.set.or.th/en/gms_exchanges/overview.html
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(8) Private equity market in Southeast Asia. NRI: Takeshi Shimamura. 2013. http://www.nri.com/~/media/PDF/global/opinion/lakyara/2013/lkr2013183.pdf
Inspire Ventures 2014