From non-control development capital to traditional management-led buyouts of private companies, PE investment has emerged as an increasingly important source of capital and value creation within the global economy. To date, the PE sector has enjoyed a good run – spurred on by growth in fund size, low cost of borrowing and impressive returns on equity.
However, the improved economic outlook and an influx of fresh capital have generated increased competition for good quality investments. The increase in funds has not corresponded with an increase in completed deals. Valuations are also being pushed up. PE funds now need to cast their nets further to explore untapped sources of value.
In addition, the growing size and complexity of many PE operations have created their own risks and demands, not least of which are the responsibilities of owning and monitoring a diverse portfolio. This is over and above the risks in the market – most notable being the effects of political change and economic environment in the region, and any resulting effects on the regulatory development.
Pertinent Challenges Faced by PEs
- Difficulty in deal sourcing
- Stretched valuations
- Limited cross-border capabilities and industry depth
- Maximising tax efficiencies
- High expectation on PE investors to value add
- Post-deal pitfalls killing values
Meeting Your Needs
PwC is the service provider of choice to PE firms around the world. We provide a one-stop shop that helps you address the challenges you face by leveraging on our technical expertise, industry depth and local presence combined with a global reach. Over 900 deal professionals in Asia Pacific, from our Transactions Services, Corporate Finance and Tax M&A teams, are on hand to ensure that you maximise your return on deals. This means that you can enjoy a single point of contact across regions coupled with consistency in service delivery and reporting standards.
Identify: Getting there first
The increased competition for good quality investments calls for innovative access to deals. With a global network providing comprehensive reach into all major cities and strengthened by our contacts with research organisations, leading banking institutions, entrepreneurs and the legal community, we are able to help you select and mediate potential high-return deals.
Evaluate: One-stop shop for assessing risk and opportunities
Our team of valuation and commercial, financial and tax due diligence experts can help you to analyse and validate the key deal issues, expose the truth behind historical data and qualify management assumptions via thorough due diligence investigations.
Execute: Thinking about tomorrow, today
Having the right structure for the investment, as well as an exit strategy, can improve the internal rate of return (IRR) on a deal. Our lead advisory and deal structuring teams have helped clients secure the right deal, at the right price and achieve optimal structures for the transaction and/or fund that produce maximum returns in a tax efficient manner.
Stabilise: Achieving stability and early post-deal wins
In order to reap the benefits that provided the business case for the deal in the first place, maximum focus and effort must be placed on achieving a successful transition. Our strategy and post-deal services experts are on hand to assist in strategy realignment and integration project management and have considerable experience in many key functional areas targeted during transition periods.
Maximise: Generating returns, maximising value
In an era flushed with money, successful PE firms are bringing something more to the table – the ability to sustain and grow value in an investment. Our strategy and performance improvement experts can help our clients focus on generating cash flows and maximising return to manage performance of their existing assets.
Harvest: Realising investment value
To avoid leaving money on the table, we are also able to provide sell-side support services to you. Once the decision to exit has been made, we can help assess the most appropriate ongoing structure and/or return realisation route, be it a trade sale, IPO or refinancing, and assist in managing the deal process.
Leading PE Investor in Asia Pacific
- End-to-End Transaction Solution Offerings
PwC provided extensive support to a major PE firm in its acquisition of a target in the automobile supplies industry with operations in Singapore, Malaysia, Indonesia, Middle East and USA. Our end-to-end solution offerings included deal origination, structuring advice, financial, tax and commercial due diligence, and other post-deal services. Our ability to work effectively across disciplines and borders enabled our client to fulfil their strategic objectives and complete the transaction within a tight timeline.
Noteworthy about this transaction was our vast global network and longstanding relationship with audit clients which enabled us to identify investment opportunities for the PE client. Coupled with our in-depth knowledge of the target’s business and competitive landscape, we were able to value-add by flagging up certain synergistic opportunities for the PE client during the course of our engagement.