SINGAPORE / ACCESSWIRE / April 21, 2020 / Having enjoyed two phenomenal years in succession, the Asia-Pacific (APAC) private equity industry slowed down in 2019 as its main driving force, China, grappled with a softening economy and the impact of a trade war with the United States. However, excluding the region's powerhouse, private equity (PE) investment remained healthy in other markets, either growing year-on-year or maintaining 2018 levels, according to Bain & Co. "It was generally anticipated that PE deal-making in the APAC region would decelerate in 2020 after a stellar run of several years, especially with China slowing down. What analysts could not have predicted is the global pandemic, which has created unprecedented challenges for all layers of society," notes Bruno Michieli, a business executive with vast experience in the technology and PE sectors. "Projections are now being revised, but there is cautious optimism as well, with recent news reports indicating that big PE equity players are gearing to exploit APAC opportunities presented by the market crash. While exits via initial public offerings (IPOs) may be put on hold, depressed valuations could accelerate acquisition activity."
The 2019 slide in APAC deal-making was partly the result of inflated selling prices, which prompted most PE investors to withdraw: as estimated by Bloomberg, they have amassed a record $388 billion of cash in their APAC funds. In contrast, liquidity in the global financial system is quickly drying up as companies tap credit lines to stay afloat and governments approve emergency funding packages to sustain national economies, Bruno Michieli comments. However, the availability of bargains does not mean that all will benefit in equal measure, as Bloomberg points out. "Not all private equity firms are positioned to profit from the rout. The biggest are in the strongest position. […] The divergence between strong and weak will widen. Less financially robust private equity firms may struggle to rescue cash-strapped portfolio companies as credit tightens. Even bigger players are likely to reassess previously hot industries or regions," the news agency says.
While the pandemic is bound to create opportunities for PE investors in the APAC region, the chances of a broader improvement on 2019 are virtually non-existent, Bruno Michieli comments, pointing to the results of Bain & Co's industry survey. According to 47% of APAC fund managers, the market is past its peak or in recession, while 59% are seriously worried about the macro picture. Most notably, 96% of the respondents expect a downturn in the next two years, which suggests growing uncertainty and a likely decline in deal-making activity. Nevertheless, certain pockets in APAC remain a source of optimism for investors, according to Nikkei Asian Review. Benjamin Ong, M&A head at KPMG Singapore, told the publication that Southeast Asia is still perceived as a bright spot, and acquisitions in this region are expected to continue.
Bruno Michieli has been perfecting his business executive skills through more than two decades, proving his talent to identify and realize profitable investment opportunities and implement operational improvement initiatives. He has built an impressive track record in the technology and private equity industries, demonstrating his ability to deliver excellent outcomes in areas such as digital strategy, business planning, e-commerce, and entrepreneurship. Since 2006, Bruno Michieli has served as the CEO of Openlot Ventures (Asia) Pte Ltd - a private equity outfit focused on the leisure and gaming technology sector in Singapore and Hong Kong.
Bruno Michieli - Singapore - Professional Profile - LinkedIn: https://www.linkedin.com/in/bruno-michieli-76934b
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