LENDER OF THE YEAR
1. SSG Capital Management
3. Adamas Asset Management
For the second year in a row, Hong Kong-based SSG Capital Management came out on top in one of the most closely-fought categories, keeping KKR and Adamas Asset Management off the top spot, despite the impressive lending activities of the latter two.
Special situations manager SSG has raised six credit funds since it was founded in 2009, delivering returns of more than 15 percent for its secured lending funds, which are unleveraged. This is significantly higher than similar equivalent funds in the market.
With its first secured lending fund, SSG Secured Lending Opportunities I, having been oversubscribed, the firm is currently fundraising for its second secured lending fund, Secured Lending Opportunities II, and is targeting more than double the $350 million it garnered in 2015 for its predecessor. SLO I was fully deployed by the end of 2016.
“The outlook is positive as the need for alternative capital in Asia is large and banks’ appetite to lend remains subdued,” says Edwin Wong, managing partner and chief investment officer of the firm.
DISTRESSED DEBT INVESTOR OF THE YEAR
1. SSG Capital Management
2. Apollo Global Management
3. Farallon Capital Management
SSG Capital Management surged past Apollo Global Management and Farallon Capital Management to win the title of distressed debt investor of the year in Asia. Despite Apollo’s $1 billion platform with IFC and Farallon’s $1.12 billion special situation fund, SSG received more than half of all votes for the category.
The firm had another busy year in 2016 with the launch of its fourth flagship special situations fund, SSG Capital Partners IV. Within three months of its launch, the fund was more than halfway to its $1.25 billion target by the end of December 2016. It has the largest-ever target for an Asia-focused special situations fund.
While single-company restructuring has been the core part of SSG’s strategy, one theme that’s emerged in the last 18 months according to SSG managing director and chief investment officer Edwin Wong, is the opportunity to purchase assets from financial institutions. Wong says that SSG has completed three such transactions in the past year. “The pipeline continues, and we haven’t seen this [level of] activity since the Asian financial crisis, so that’s been very positive.”
REAL ESTATE DEBT FUND MANAGER OF THE YEAR
1. Diamond Realty Management
3. Altico Capital
Diamond Realty Management claimed the title of real estate debt fund manager thanks to a fruitful year of fundraising that witnessed the close of its two mezzanine funds.
The Mitsubishi Corporation’s private real estate debt subsidiary saw final closes on DREAM Mezzanine Debt Fund IV and Fund V of $167 million and $185 million respectively.
According to Akira Nozu, managing director of the firm, Fund IV has been fully deployed while Fund V has deployed 90 percent of its capital and will reallocate its redemptions to new projects this year.
In order to counter growing competition, the manager expanded its investment targets to hotels and industrial properties in Fund IV, in addition to its traditional mezzanine debt collateralised by logistics developments in its previous funds.
The two funds attracted over 20 domestic institutional investors in Japan, including corporate pension funds, educational institutions and regional banks. The manager will consider launching a new fund after the end of Fund V’s investment period in January next year.
INFRASTRUCTURE DEBT FUND MANAGER OF THE YEAR
1. AMP Capital
2. International Finance Corporation
3. Mizuho Global Alternative Investments
AMP Capital retained its crown amid growing activity from other players in the region. IFC launched its $5 billion MCPP Infrastructure programme, while Mizuho introduced a new ¥100 billion ($99 million; €93 million) fund. AMP Capital beat its target with the close of its second global infrastructure debt fund on $1.1 billion and is currently fundraising for its $2 billion third fund.
Andrew Jones, head of infrastructure debt, says that the latest fund has received strong support from existing investors and over half of the commitments have come from Asia, in particular Japan and Korea. “We look to generate high cash yield with low capital volatility. And most Asian investors are attracted to our conservative risk-return profile with an expected return of 10 percent,” he says.
The third fund will continue fundraising while its second fund is approaching the end of its investment period. AMP Capital has attracted more than 100 global institutional investors to its three infrastructure debt funds. The number of Asian investors in its debt strategy has more than tripled since 2012.
DEAL OF THE YEAR
1. Tricor Holdings – Partners Group
2. GE Capital Services India – AION Capital Partners
3. Kaisa Group – Farallon Capital Management, BFAM Partners
Garnering almost half of all votes in the category, private equity firm Permira’s acquisition of Tricor Holdings from the Bank of East Asia and NWS Holdings for HK$6.5 billion ($835 million; €744 million) stood out in 2016.
Partners Group provided a six-year mezzanine debt financing of up to $75 million for the deal, which was essential to the acquisition amid a highly competitive sale process. The subordinated debt represented leverage of 1.47x. The $360 million senior financing provided by banks had a five-year tenor and an opening leverage of around 5.6x.
“Partners Group has identified subordinated debt as an attractive investment opportunity in the broader Asia-Pacific region in the current market environment, given that regional banks – which are otherwise very active lenders – are not typically long-term holders of junior debt,” says Scott Essex, partner and co-head of private debt, Partners Group.
The deal marked Permira’s first attempt to enter the corporate services market in Asia.
FUNDRAISING OF THE YEAR
1. SSG Capital Management
2. Farallon Capital Management
3. CDH Investments
SSG Capital Management proved there’s no contest when it comes to fundraising in the region. The firm is currently raising capital for its second secured lending fund and its fourth flagship special situations fund, targeting a combined $2 billion.
Both the funds were launched with their predecessors close to fully deployed. Thanks to a successful track record, the second secured lending fund is targeting $750 million, more than doubling the $350 million SLO I raised in 2015. At the same time, its fourth special situations fund is aiming to collect $1.25 billion, the largest-ever target for an Asia-focused special situations fund.
The firm had corralled more than $1 billion in total by the end of December 2016, only shortly after the funds were officially launched.
“We are very fortunate to have the support of some of the largest and most reputable LPs. They consist of sovereign wealth funds, US state pensions, insurance companies and endowments,” says Edwin Wong, managing director and chief investment officer of SSG Capital Management.
Established in 2009, the Hong Kong-based alternatives manager has launched six funds and has over $3 billion in assets under management.
FUND FINANCIER OF THE YEAR
2. Deutsche Bank
3. Standard Chartered
Citi retains top spot for fund financier in Asia, beating strong contenders Standard Chartered and Deutsche Bank. Citi added another $1.5 billion of subscription facility commitments to the market in Asia through its dedicated team for fund managers, last year. Terrance Philips, the team’s managing director, says the bank has the advantage of a dedicated team solely focusing on private equity firms across Asia. For many banks targeting institutional clients, private equity is only a small portion of their focus.
“We recently just expanded the team to six dedicated bankers covering subscription lending in Asia, all of whom have had experience in this business already. We believe that this is more than sufficient to cover the growth we anticipate in Asia,” says Philips.
“We have seen a trend where LPs are more accepting to PE firms using lines of credit today and Citi is definitely open for business in this competitive market,” he says, adding that he expects private equity firms will be a growing client base for banks in the future.
LAW FIRM OF THE YEAR
1. Allen & Overy
2. Kirkland & Ellis
Winning law firm Allen & Overy had a great year in the region as it built up its relationships in the debt capital markets.
The firm set out to reinforce the US securities support offered to clients across the Asia-Pacific region with a number of senior appointments. These included the hire of Alex Tao, a Mandarin-speaking US partner from Davis Polk & Wardwell, and the relocation of Hong Kong partner Alex Stathopoulos to its Singapore office alongside Mark Leemen as a US securities partner in Australia.
At the same time, the firm was advising on a roster of financing deals in Asia, including Apollo’s purchase of GE’s commercial lending and leasing business in India, a landmark deal in Indian financial services.
The firm tops legal advisory services in global debt, equity and equity-related capital markets transactions, advising issuers and managers on 926 deals worth $657.9 billion in 2016, according to data from Thomson Reuters.
PLACEMENT AGENT OF THE YEAR
1. Mercury Capital Advisors
3. First Avenue
Mercury Capital Advisors was the clear winner in the placement agent of the year category, taking the title from last year’s winner UBS.
The firm had an impressive year in Asia as the advisor for Hong-Kong based SSG Capital Management’s two credit funds with their combined target of more than $2 billion. The manager had corralled over $1 billion in December 2016 within three months of the launch.
So far, the firm has helped SSG in raising its three special situation funds and its second senior secured fund.
With a global footprint, the placement agent is able to internationalise a fund’s investor base and bring in institutional capital. Mercury covers over 2,500 institutional investors around the globe with around 200 in Asia. It has successfully raised 12 consecutive oversubscribed funds in Asia to date.
“We remain hugely optimistic on the credit opportunity in Asia … We are in the early stages of what undoubtedly will be one of the most important growth opportunities in the region over the next few years,” says Enrique Cuan, managing partner at Mercury Capital Advisors.