Asia-Pacific Private Equity Strategy
Asia-Pacific Private Equity Strategy

Asia-Pacific Private Equity Strategy

 
 
 
Summary

The Asia-Pacific Private Equity Strategy, managed by Morgan Stanley Private Equity Asia (MSPEA), invests primarily in highly structured minority investments and control buyouts in growth-oriented companies.  The experienced investment team is led by senior professionals with extensive industry relationships, in-depth market knowledge and the ability to apply international investment principles within each local context.  

 
 
Investment Approach
Philosophy

Morgan Stanley Private Equity Asia practices a conservative, disciplined, value-oriented investing strategy, with a goal of:

  • Targeting high growth rates, large domestic or export markets, and favorable environments
  • Focusing on long-term value propositions, proven business models, and sustainable economies
  • Developing an informational advantage and maintaining discipline through rigorous due diligence
  • Investing in fast growing, leading local franchises, and buy-and-build situations
  • Avoiding dependency on increasing public market valuation levels or excessive leverage
 
Differentiators
Experienced Investment Team

The investment team seeks to generate attractive risk-adjusted returns consistent with its leading track record, which dates to 1993. The investment team combines considerable knowledge and experience investing in Asia with rigorous training and execution skills.

Strong Alignment with Limited Partners

The economic interests of the investment team are aligned with those of the Limited Partners through the investment team’s participation in the funds.

Unique, Proprietary Deal Flow

The investment team has proven its ability to source and develop proprietary investment opportunities in Asia by leveraging its unique resources, which include each investment team member’s network of local contacts and current and former portfolio company executives as well as Morgan Stanley’s strong brand name in key Asian markets.

 
Investment Process

The MSPEA investment team adheres strictly to the selective, disciplined and rigorous investment process that it has developed and refined over the past 20+ years. This process is designed to ensure that investments are reviewed using high levels of scrutiny and due diligence prior to consummating an investment.

1
Investment Committee

The investment committee, advised by the investment team and also including a limited number of senior officers of Morgan Stanley, is involved throughout the entire investment process, including initial review and evaluation of potential investments, consideration of applicable industry dynamics and approval of fund investments and is responsible for making investment and divestment decisions. The investment committee brings to bear the combined investment experience and perspectives of the investment team as well as some of Morgan Stanley's most senior and experienced professionals to determine whether potential investments meet the most stringent criteria consistent with global best practices.

2
Screening Prospective Investments

Each investment opportunity identified by the investment team is first reviewed based on preliminary discussions with management and sellers to determine the key parameters of the opportunity and the competitive strengths of the company. In addition, the investment team undertakes an intensive review of the industry's dynamics, utilizing its own experiences and leveraging Morgan Stanley's extensive networks of industry experts to gain an understanding of the company's competitive positioning. Following this analysis, the investment team determines whether it is likely to meet the investment committee's strict investment criteria and subsequently decides whether it merits further development, research and devotion of additional resources.

3
Strategically Evaluating Investments

If an investment opportunity passes preliminary screening, the investment team then performs due diligence, generally with the cooperation of management, to achieve a comprehensive understanding of the company's competitive positioning and the opportunities and risks associated with the proposed investment. The investment team's analytical process includes constructing business and financial scenarios that test operating and capital structure assumptions and estimates potential returns from the investment. The investment team draws on other experts from both within and outside Morgan Stanley, including experienced industry executives, research analysts and investment banking professionals, who cover the relevant countries, industries and companies.

4
Structuring and Executing Investments

If an investment opportunity meets the investment committee's investment criteria and standards, the investment team then assembles a dedicated transaction team that consists of leading legal counsel, financial and tax accountants, and if necessary, other advisors such as industry experts to assist with formal due diligence, structuring and negotiations. The investment team and advisors undertake a thorough due diligence review to ensure the transaction structure and terms take into account all relevant data points specific to the opportunity, including key leverage points that can be utilized to negotiate the most favorable terms.

Investments

Current and exited portfolio investments of active Private Equity Asia funds

CURRENT PORTFOLIO
ZCL Chemical ZCL Chemicals Limited is a specialized pharma company based out of India which manufactures and exports advanced drug intermediates and Active Pharma Ingredients (API). Company focuses on the niche therapeutic areas of central nervous system (CNS), anti-retroviral (ARV), anti-diabetes and controlled substances.
China Showyu Founded in 2005 and headquartered in Chengdu, Showyu is a leading aesthetic service provider in China operating an extensive store network.
DSG International (Thailand) DSG International (Thailand) is one of the top independent producers of branded baby and adult diaper products in Southeast Asia, with leading market shares in Thailand, Malaysia and Indonesia.
CDP Holdings Founded in 2004 and headquartered in Shanghai, CDP is one of the leading private sector payroll & benefits HR outsourcing companies in China through Software as a Service.
Coinage International Founded in 2004 and headquartered in Hong Kong, Coinage is one of the leading financial education companies in China, with a dominating position in the financial planning certification market.
IVD Medical Headquartered in Shanghai, IVD Medical is one of the leading distribution groups of In-Vitro Diagnostic analyzers and reagents in China.
Five Star Business Finance Five Star Business Finance is a non-banking financial company, providing secured loan against property to the low-income segment in India.
Huang Ji Huang Huang Ji Huang is one of the leading restaurant franchise operators in China, with an extensive network covering mainland China, Hong Kong, Malaysia, Singapore, Australia and Canada.
China Kang Fu Founded in 1988 and headquartered in Beijing, China Kang Fu is one of the pioneers of the Chinese financial leasing industry.
Omni Remotes Omni Remotes is a global business that develops, manufactures and sells remote control and connectivity related devices as well as accessories.
Renfang Medical Renfang Medical Holdings Limited is engaged in the investment and management of general hospitals and specialty hospitals with leading positions in the local markets in China.
Baijia Founded in 2004 and headquartered in Shanghai, Baijia is one of the largest private sector maternity hospital chains in China.
Sino Gas Founded in 2001, Sino Gas is engaged in the development and installation of natural gas distribution networks, and the distribution of natural gas to residential and industrial customers in China.
AMTD Group Established in 2003, AMTD Group is the largest financial planner and independent insurance broker in Hong Kong by number of clients.
Hanwha L&C Hanwha L&C is one of the leading interior building materials manufacturers in Korea.
Innocean Worldwide Innocean Worldwide is one of the largest advertisement agencies in Korea. The Company provides advertising & marketing services to leading Korean corporations.
Noah Education Noah Education Holdings Ltd. is the third largest directly-owned-and-operated private kindergarten and primary/secondary education chains in China by number of campuses.
Janalakshmi Financial Services Janalakshmi Financial Services is one of India's leading urban-focused microfinance companies.
China Feihe China Feihe International is one of the leading and fastest growing domestic infant milk formula producers in China.
Ssangyong C&B, Monalisa Seoul, Monalisa Daejeon Ssangyong C&B, Monalisa Seoul, Monalisa Daejeon and three supporting ancillary companies comprise one of Korea's largest tissue products manufacturers.
Hi-24 Hi-24 is the largest convenience store chain in Beijing with over 30% market share by store count as of September 2012.
Tianhe Chemicals Group Tianhe Chemicals Group is one of China's largest producers of lubricant oil additives and a leading global producer of specialty fluorochemicals.
Nolboo Nolboo is one of the largest and most widely recognized full-service Korean restaurant franchises in Korea, with a network of over 1,000 stores across a portfolio of over 10 sub-brands as of December 2015.
CreditEase CreditEase is one of the first and largest person-to-person microfinance service providers in China.
China XD Plastics China XD Plastics is engaged in the development, manufacture, and sale of modified plastics primarily for automotive applications, and is the one of the largest domestic players in China.
Yongye International Yongye International is crop nutrient company in China.
Buchang Pharmaceutical Buchang Pharmaceutical Company is a leading non-SOE pharmaceutical company in China that engages in the research & development, production and distribution of traditional Chinese medicines.
Sihuan Pharmaceutical Sihuan Pharmaceutical is engaged in the research, manufacturing, marketing and sales of pharmaceutical drugs in China.
Jeonju Paper Jeonju Paper is one of Korea's largest manufacturers of newsprint and specialized paper, and one of the largest newsprint exporters in Asia.
Nature Home Nature is one of China's leaders in the design, marketing, and manufacturing of wood floorboards across three product segments: solid wood, engineered and laminated wood floorboards.
CTBC Chinatrust Financial Holding Company is one of the largest listed financial institutions in Taiwan by market capitalization and one of the largest private sector banks.
Ni&Co Ni&Co is an integrated non-ferrous metal producer with three main business units: the mining and processing of lithium compound products, the recycling of non-ferrous metals, and the mining and processing of zinc.
ACR ACR is an Asia-focused specialty lines reinsurance company established by an experienced team, the majority of who have significant experience in the industry and in Asia.
Hyundai Rotem Hyundai Rotem is Korea's monopoly manufacturer of subways, locomotives and high-speed railcars, monopoly manufacturer of military tanks and one of Korea's leading manufacturer of machinery used in steel and automobile plants.
EXITED PORTFOLIO
Sparkle Roll Sparkle Roll Group Limited is a leading distributor of luxury brand products in China, targeting the fast-growing population of ultra high net worth individuals in the country.
Tongkun Group Tongkun Group is the largest polyester filament producer in the world with annual polyester filament capacity of 1.38 million tons by the end of 2009.
Biotor Biotor was the world's largest producer of castor oil and derivatives with a 35% market share.
E.Sun E.Sun is one of the largest private-sector banks and financial holding companies in Taiwan.
ABC Learning ABC Learning was a childcare operator which provided educational and developmental childcare services in Australia/New Zealand, the US, and the UK.
Shanshui Shanshui is currently the 3rd largest cement producer in China and largest player in the Shandong and Liaoning provinces.
Samsung Life Samsung Life is one of Korea's largest life insurance companies company and the flagship investment holding company of the Samsung Group.
Dongxiang Dongxiang a leading branded sportswear company in China.
CTCI Corporation The CTCI Corporation is one the largest engineering, procurement and construction companies in Taiwan and Asia.
Ssangyong Ssangyong is one of Korea's leading commodities trading and distribution companies.
Belle Belle is a leading manufacturer and distributor of ladies' shoes and accessories in China.
 
 
 
 
Investment Professionals  View Team Details >
Chief Executive Officer of Private Equity Asia
28 years industry experience
Chief Investment Officer of Private Equity Asia
21 years industry experience
Chief Operating Officer of Private Equity Asia
20 years industry experience
Managing Director
18 years industry experience
Managing Director
16 years industry experience
Managing Director
18 years industry experience
Managing Director
19 years industry experience
Managing Director
10 years industry experience
Managing Director
22 years industry experience
Executive Director
10 years industry experience
Executive Director
8 years industry experience
Executive Director
13 years industry experience
Executive Director
19 years industry experience
Executive Director
11 years industry experience
Executive Director
4 years industry experience
Executive Director
4 years industry experience
Executive Director
13 years industry experience
Executive Director
10 years industry experience
Vice President
8 years industry experience
Vice President
9 years industry experience
Vice President
10 years industry experience
Vice President
8 years industry experience
Vice President
9 years industry experience
Vice President
8 years industry experience

CONTACT US

For more information about Morgan Stanley Private Equity Asia, please contact
private.equity@morganstanley.com

 
 
 
 

As of September 30, 2017. Team information may change from time to time.

Alternative investments are speculative and include a high degree of risk. Investors could lose all or a substantial amount of their investment. Alternative investments are suitable only for long-term investors willing to forego liquidity and put capital at risk for an indefinite period of time. Alternative investments are typically highly illiquid – there is no secondary market for private funds, and there may be restrictions on redemptions or assigning or otherwise transferring investments into private funds. Alternative investment funds often engage in leverage and other speculative practices that may increase volatility and risk of loss. Alternative investments typically have higher fees and expenses than other investment vehicles, and such fees and expenses will lower returns achieved by investors.

This is prepared for sophisticated investors who are capable of understanding the risks associated with the investments described herein and may not be appropriate for you. The information presented represents how the portfolio management team generally implements its investment process under normal market conditions.

All information provided has been prepared solely for information purposes and does not constitute an offer or a recommendation to buy or sell any particular security or to adopt any specific investment strategy. The information herein has not been based on a consideration of any individual investor circumstances and is not investment advice, nor should it be construed in any way as tax, accounting, legal or regulatory advice. To that end, investors should seek independent legal and financial advice, including advice as to tax consequences, before making any investment decision.  There is no guarantee that any investment strategy will work under all market conditions, and each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market. 

Any views and opinions provided are those of the portfolio management team and are subject to change at any time due to market or economic conditions and may not necessarily come to pass. Furthermore, the views will not be updated or otherwise revised to reflect information that subsequently becomes available or circumstances existing, or changes occurring. The views expressed do not reflect the opinions of all portfolio managers at Morgan Stanley Investment Management or the views of the firm as a whole, and may not be reflected in all the strategies and products that the Firm offers.

Diversification does not protect you against a loss in a particular market; however it allows you to spread that risk across various asset classes.  Past performance is no guarantee of future results.

Real estate values are affected by many factors including interest rates and property tax rates, zoning laws, changes in supply and demand, and in the local, regional and national economies.

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Funds of funds often have a higher fee structure than single manager funds as a result of the additional layer of fees. Alternative investment funds are often unregulated, are not subject to the same regulatory requirements as mutual funds, and are not required to provide periodic pricing or valuation information to investors. The investment strategies described in the preceding pages may not be suitable for your specific circumstances; accordingly, you should consult your own tax, legal or other advisors, at both the outset of any transaction and on an ongoing basis, to determine such suitability.

A separately managed account may not be suitable for all investors. Separate accounts managed according to the Strategy include a number of securities and will not necessarily track the performance of any index. Please consider the investment objectives, risks and fees of the Strategy carefully before investing. A minimum asset level is required. For important information about the investment manager, please refer to Form ADV Part 2.

No investment should be made without proper consideration of the risks and advice from your tax, accounting, legal or other advisors as you deem appropriate.

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All investing involves risks, including a loss of principal. Alternative investments are speculative and involve a high degree of risk. These investments are designed for investors who understand and are willing to accept these risks. Performance may be volatile, and an investor could lose all or a substantial portion of his or her investment.

 

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