Earlier this month, the Wall Street Journal noted that private-equity firms in Southeast Asia have been selling stakes in the companies they own more quickly than in the past – often three years or less from when they bought in. Chua Soon Ghee, managing partner for the Southeast Asia unit of A.T. Kearney, was quoted as saying:
“Private-equity firms selling shares within three years or less shows that there is some amount of opportunism… PE firms won’t exit unless they think they can get the valuations they are looking for, so the reason why some are exiting in less than three years is because their returns expectations have been reached and they think valuation cycles may have peaked, as well as maybe they want to take some risks off the table.”
Its worth adding that in China, exiting or selling stakes less than two years after buying in is common. In fact and this year alone, five private-equity-backed Chinese companies have gone public in Hong Kong less than 24 months after the firms bought in. These companies included Shanghai La Chapelle Fashion Co., Jiashili Group Ltd., iDreamsky Technology Ltd., China Shengmu Organic Milk Ltd. and Ourgame International Holdings.
To read the whole article, Buyout Firms in Southeast Asia Are Cashing Out Faster, go to the website of the Wall Street Journal.
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