Asia-Pacific private equity outlook 2013

Making an exit: our views

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PE players use numerous tactics to ensure value is created and maintained to maximize exits. In a recent discussion, our PE leaders in the Asia-Pacific region offered their perspectives on exit strategies and value creation.
See more in the full report: Asia-Pacific private equity outlook 2013.

“Value in the new paradigm is driven by profit growth, particularly as the multiple expansion on a 3% GDP platform will be minimal.

As such, PE is focused on improving performance through back-office efficiencies and redeploying resources into front-office activities.

Bolt-on acquisitions and realignment of the product or service suite are also key.”
Bryan Zekulich, Oceania Private Equity Leader

“PE firms are focusing on strengthening management and incentivizing performance, emphasizing strong budgeting and planning, controlling and optimizing cash flow and debt levels, tightening monitoring and reporting systems, balance sheet optimization and other core business improvements.

This will improve core EBITDA and also result in multiple expansion. Additionally, to maximize exit values for investees, PE players are going to a global buyer pool, as well as other PE buyers through secondary buyouts.”
Luke Pais, Private Equity Leader for the ASEAN

“For the time being, PE houses are doing what they have traditionally done as they await a more buoyant exit market: focusing on improving operational efficiency and guiding companies to tap new markets for growth opportunities.

At the same time, we have seen PE houses focus on restructuring or refocusing their investees, and some are undertaking recapitalizations and dividend distributions as a means to creating realized returns, which is absolutely critical for keeping limited partners satisfied.”
Robert Partridge, Managing Partner for Transaction Advisory Services and Private Equity for Greater China

“Private equity managers are going to great lengths to encourage portfolio companies to develop good governance structures and strengthen overall governance to win favor from potential investors or buyers.

Unfortunately, with the global economy going through a series of ups and downs and the export picture for China affecting markets globally, the timing may be wrong to divest portfolio assets.

People's minds seem set on IPOs and getting back that return on investment, but if they can find some interested investor then perhaps they will take that route.”
Ringo Choi, Asia-Pacific IPO and Growth Markets Leader