Asia tops North America in private equity investments

A quarter of all private equity deals were done in Asia, says Preqin.

The top 10 PE firms have increased their investment in Asia significantly over the past three years at the expense of North America-focused investment, Preqin research has revealed.

The study also found that there has been a marked change in the types of deals executed by these firms over the past five years; LBOs now account for over half of deal value, compared to a quarter during the boom era of 2006/2007, while public-to-private deals account for 16% of deal value in 2011 to date, compared to 74% in 2007.

The report looked at the extent to which the top 10 firms, determined by fundraising in the past 10 years, dominate the private equity industry, examining fundraising statistics, investor appetite for the firms’ funds, deals data, fund performance, and levels of dry powder these firms have available for investment.

The Top 10 Firms: Fundraising and Dry Powder
Top 10 firms account for 18.6% ($425.7bn) of total $2.3tn private equity capital raised in the past 10 years.
Top 10 firms have contributed at least 10% of total capital raised annually since 2004; the figure peaked at 28% in 2008.
At least 55% of funds managed by these firms closed at or above target between 2006 and 2008, and 2010-2011 to date. In 2009 the figure fell to 43%.
The firms have a combined 14 funds in market targeting an aggregate $24.3bn, 7% of total capital being sought.
68% of available dry powder is assigned to North America, 22% to Europe and 9% for investment in Asia.
Almost one-fifth of private equity investors have made a commitment to at least one fund managed by a firm in the top 10 and of these investors, 46% have invested in more than one.

The Top 10 Firms: Deals
The top 10 account for 45% of aggregate deal value for the past 10 years; 1,300 deals worth $1tn have been completed.
Average size of deals completed by the top 10 has fluctuated; it was $4.2bn in 2006, $600mn between 2008 and 2009 and almost $1bn in 2010/2011 to date.
LBOs accounted for c.25% of deals completed by the top 10 firms in 2006/2007 and now account for 50%.
Public-to-private deals accounted for 74% of completed deals in 2007 and 17% of those completed 2011 to date.
75% of deals were North America-focused in 2006/2007; the region now accounts for c.60%.
Asia accounted for 5% of deals completed 2006/2007, and 23% of those completed 2011 to date.