1. LatAm vs SEA:
The Race for Private
Equity Supremacy
Darwin Jayson Mariano
Like a battle of two Goliaths, emerging economies from Latin
America and Southeast Asia are toughing it out in the world
stage as both regions try to outdo each other in the arena of
Private Equity deals and investments. According to data
released by the Latin American Private Equity and Venture
Capital Association (LAVCA), private equity (PE) and venture
capital (VC) investing in Latin America hits 5-year high in 2012
with firms committing a total of $7.9 billion, representing 21%
increase over 2011.

2. Meanwhile, according to a report from Bain,
it was revealed that $5.3 billion worth of
private equity deals have been made in
Southeast Asia in 2011, with 2012 figures
expected to be roughly the same, adding that
“Southeast Asia’s aggregate GDP topped $2
trillion in 2011 and the region is home to a
mostly young and dynamic population of
nearly 600 million increasingly affluent
customers.”
Deals, deals and more deals
According to the same LAVCA report, the
$7.9 billion total in Latin America reflects
237 investments, a 37% increase in the
number of deals from previous year.
Investments in consumer-related sectors
cornered 40% of the pie with the rest of the
deals coming from financial services,
restaurants, education, fitness, healthcare
and consumer goods. IT deals also made a
strong showing with the amount of dollars
invested in the sector doubling compared to
the previous year.
“As in previous years, Brazil was the largest
market for PE/VC investments in Latin
America, accounting for 72% of the total
invested and 62% of the total deals. In
Mexico, the total number of deals was on par
with 2011, but dollars committed increased
by 50% over 2011. Activity in the Andean
region was driven by an increasing number
of cross border deals, with managers in
Colombia, Peru and Chile investing across
all three markets,” the report says.

3. Private
equity and
venture
capital
investing in
Latin
America
hits 5-year
high in
2012.
While the landscape seems to be rosy in Latin America,
there are also a lot of exciting developments happening in
Southeast Asia. In a recent Asia-Pacific Private Equity
Outlook 2013 report by Ernst & Young, Luke Pais, Ernst &
Young’s M&A Leader for the ASEAN, opined that
“Curiosity from LPs is piquing and Southeast Asia is
becoming a very exciting market.”
We learned from the same report that since 2011, Indonesia
has seen 13 deals worth close to US$900 million. Deal value
in Thailand is at US$114 million over the same period. On
the sell side, firms and fund managers are able to take
advantage of their investment on Southeast Asian assets.
“In 2011, Navis Capital Partners sold Singapore-based
King’s Safetywear Limited, a manufacturer of industrial
safety footwear and personal protective equipment, to USbased Honeywell International for US$345.8m. Navis
purchased the company in 2008 for US$83.5m. That deal
was preceded by Navis’ sale of Linatext, a Malaysia-based
maker of specialty rubber-based products purchased for
US$31.1m, to the Weir Group for US$200m.” the report
says.

4. LATIN AMERICA
SOUTHEAST ASIA
$7.9B
$5.3B
PE & VC investing in Latin America in 2012
acc. to LAVCA
worth of PE deals in Southeast Asia in 2011 acc. to
Bain. Similar figures expected in 2012
In a recent interview with Bloomberg,
Sebastien Lamy, a partner at Bain & Co. said
that, “The overall economic outlook for
Southeast Asia remains solid and we are
seeing strong interest by investors.”
“Deal-making in the region will pick up in
2013 or 2014,” he adds.
The Battle Heats Up
Will 2013 be the year when Southeast Asia
finally stages a private equity breakthrough?
Analysts are quite positive about this. In its
Global Private Equity Report 2012 by Bain
& Company, Inc., it has been established that
the Southeast Asian region is forging a more
tightly integrated platform for trade and
commerce. Quoting from the report:
“Although it is economically, ethnically and
culturally diverse, there is much that makes
Southeast Asia appealing for PE investment.
Spanning a territory from the Philippines in
the east to Thailand in the west, the region’s
economies rebounded smartly from the
global financial crisis, outperforming both
China and India in recent years.
“From the perspective of PE investors
specifically, Southeast Asia is attractive for
many reasons. It is relatively well endowed
with scale companies, particularly in
Singapore, Malaysia and to a lesser extent,
Indonesia. Unlike China and India, where PE
funds have typically been able to take
minority stakes in smaller companies or
limit themselves to private investments in
public equities, Southeast Asia has
traditionally been a buyout market, offering
GPs more opportunities to create value.”
Latin America’s largest economy, Brazil, on
the other hand shows less than stellar growth
lately, which could affect PE activity.
According to the same report by Bain:
“GDP growth slowed to less than 4% in 2011
from the 7.5% pace of a year earlier and PE
investment activity largely followed the
macroeconomic trend. New investments

5. The overall economic outlook for Southeast
Asia remains solid and we are seeing strong
interest by investors. Deal-making in the
region will pick up in 2013 or 2014
Sebastien Lamy, Partner, Bain & Co. in an
interview with Bloomberg
were off nearly 50% in 2011, according the
Emerging Markets Private Equity Association, an
industry trade group. But the dramatic decline
overstates the actual falloff in deal making.
Investments in 2010 spiked due to a handful of
large buyouts. Remove these and the drop in deal
activity was closer to 13%.
“The fact that the data is sensitive to the impact
of a few big deals reveals an important
characteristic of PE in Brazil: Brazil remains a
thin market, dominated by small and midsize
investments, chiefly in family-owned
businesses.”
Who wins?
The duelling private equity performance by both
regions could be attributed to the overall
dynamism of the private equity market, which
could only be a good thing. While there are
surely some pluses and minuses, in terms of PE
attraction, for both sides, the fact that Latin
America and Southeast Asia continue to attract
significant PE investments show some great
promise for these regions.
The saga still continues. The fundamentals
of good investment decision will not change
and private equity managers will decide
whatever is best for their portfolio. Who’s
the winner? Perhaps it’s safe to say that the
race for supremacy is still raging and things
could still go one way or the other.
Learn more about capitalising on
your private equity investments in
Southeast Asia and learn about
successful exit strategies at the 8th
Annual Private Equity Southeast Asia
Summit 2013.
To find out more, visit
www.private-equityseasia.com
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About the Author:
Darwin Jayson Mariano is the Online Content Manager and Regional Editor - Asia for International Quality & Productivity Center
(IQPC), a leading producer of events and conferences for business leaders around the world. Connect via LinkedIn
sg.linkedin.com/in/whoisdarwin or email darwin.mariano@iqpc.com.sg
References:
http://www.bain.com/Images/Bain_and_Company_Global_Private_Equity_Report_2012%20public.pdf | http://www.pehub.com/189737/private-equity-and-vc-investing-in-latin-america-hits-5-year-high-in2012/ | http://www.avcj.com/avcj/news/2222930/se-asian-private-equity-deals-to-rebound-in-2013-bain-co | http://www.businessweek.com/news/2012-11-06/bain-says-private-equity-deals-to-reboundsoutheast-asia | http://www.gti.org/files/global_private_equity_report_2012.pdf | http://www.ey.com/Publication/vwLUAssets/Private_equity_Latin_America/$FILE/Private_equity_Latin_America.pdf |
http://mergermarketgroup.com/wp-content/uploads/2012/12/RRD-Newsletter-Issue-11_Latam_V8_HS.pdf | http://blogs.wsj.com/deals/2012/11/21/interest-shifts-to-southeast-asia/