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Hans Schlaikier, Hedgeweek

Henderson & TIAA-CREF create USD20billion real estate fund… M&A activity involving Asia Pacific down 23.1 per cent for 1H13…

M&A activity involving Asia Pacific is down 23.1 per cent for the first half of 2013 compared to the same period last year, amounting to USD154.3billion reported the Singapore Business Review, quoting a Thomson Reuters release.

This is as a result of completed deal numbers falling 22.9 per cent to 2,462 deals. In addition, the number of announced M&A deals involving Asia Pacific ex-Japan companies came to USD215.6billion, down nearly 9 per cent on the first half of 2012 (USD236.1billion); the slowest start since 2009. Nevertheless the average M&A deal value grew to USD76.1million compared to USD70.6million 1H12 as deal making “involving Asia Pacific companies witnessed at least three transactions above USD5billion announced during the second quarter of this year”, according to the release.

It continued: “M&A transactions targeting Asia Pacific reached USD173.5billion to date, down 6.0 per cent compared to the first half of 2012 and the lowest first-half level volume since 2009 (USD123.8billion). Chinese companies continued to be the preferred target by both domestic and foreign acquirers with USD76.6billion, up 17.4 per cent in deal value, and captured 44.2 per cent of Asia Pacific-target M&A activity.”
Private equity-backed M&A activity in Asia Pacific declined 18 per cent for 1H13 compared to 1H12, totalling USD10.4billion (compared to USD12.7billion). China has been the most targeted nation YTD, accounting for 30.5 per cent of private equity-backed M&A activity in the region.

Henderson and North American fund, TIAA-CREF (Teachers Insurance and Annuity Association – College Retirement Equities Fund) have partnered up to create a USD20billion real estate fund. The new partnership, TIAA Henderson Global Real Estate, will combine both funds’ European real estate businesses and Henderson’s Asia Pacific property operation. Henderson said that growing investor demand for real estate fund managers to commit their own capital to deals was a key reason behind the partnership. It is believed that TIAA-CREF will invest GBP1.5billion over the next five years.   

Former banker Paul Conway is raising around USD60million for a hedge fund that will target undervalued US-listed Chinese companies reported Reuters Hong Kong. With the aggressive short-selling activities of Muddy Waters in firms such as Sino Forest grabbing headlines last year, Chinese companies trading on US markets have suffered a reputational hit for fraudulent reporting. In Conway’s opinion, though, most of these companies have been culled from overseas markets, and what remains are, he estimates, nearly 150 companies that run good businesses and are undervalued. The quality of overseas-listed Chinese companies has improved since the scandals said Conway, while valuations remain low.

Conway is setting up the hedge fund with Chien Lee. It will be named the China Revaluation US Fund and will hold a portfolio of between 15 to 20 stocks with a two-year capital lock-up. The fund will focus on consumer discretionary, hotels, media, education and travel and leisure market sectors and will be managed by Paul Jackson, a former portfolio manager at Fidelity and Wellington.

Finally, alternative investment specialist Direxion has launched ‘bull’ and ‘bear’ leveraged ETFs to track the Japanese equity market reported FINalternatives. The Daily Japan Bull 3X Shares will offer three times leverage and track the MSCI Daily TR Net Japan USD Index, with the Daily Japan Bear 3X Shares doing the exact opposite. The index itself is tied to the MSCI Japan Index, which tracks the performance of Japanese stocks listed on the Tokyo Stock Exchange, Osaka Stock Exchange, Nagoya Stock Exchange, and JASDAQ. “With these new 3X bull and bear funds, Direxion is excited to be able to allow investors to express an opinion on the economic dynamics taking place that are affecting the Japanese equity market,” commented Eric Falkeis, president of US-based Direxion, which has been offering alternative investment strategies since 1997.


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