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Private equity hits record, bypasses Taiwan: Deloitte

SLEEPING BEAUTIES:Deals by private equity funds fell from US$4.5bn in 2007 to less than US$2bn last year, but they are eyeing local firms with essential offerings, it said

By Kao Shih-ching  /  Staff reporter

Global private equity funds had investments of US$453 billion at the end of last year, a record high, but their investments in Taiwan have continued to decrease over the past few years, Deloitte Taiwan said in a report published on Wednesday.

The funds’ investment value bottomed out at US$178 billion in 2010, after shrinking from US$407 billion in 2008 to US$213 billion in 2009 due to the global financial crisis, the report said, adding that their size has gradually recovered since then.

Last year, the funds made new investments in 1,063 companies for a total of US$366 billion, Deloitte said.

In Asia, global private equity funds invested in 710 firms with a total capital of US$115 billion last year, up 40 percent and 18 percent respectively from 2016, it said.

The funds last year favored the technology, media and telecoms industries, with a combined investment of US$98.6 billion, including Toshiba Corp’s sale of its chip unit to a consortium led by US private equity firm Bain Capital LLC for US$17.9 billion, the report said.

Private equity also looked for consumer business deals, making US$85.7 billion in investments last year, the firm said, citing KKR & Co taking over Unilever’s spreads business for US$8 billion.

However, funds have been less interested in Taiwan over the past few years, compared with their presence in other regional markets, such as China, Japan, South Korea and ASEAN nations, the report said.

Investments in Taiwan shrunk from US$4.5 billion in 2007 to less than US$2 billion last year, it said.

However, private equity investors are interested in so-called “invisible champions” in Taiwan — low-profile companies that provide key services or components, Deloitte said.

If KKR succeeds in acquiring LCY Chemical Corp (李長榮化工), the size of private equity investment in the nation this year could exceed US$1.9 billion, it said.

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