Private Equity
2019 White Paper Issues
The Committee appreciates the government’s openness to dialogue with industry stakeholders and acknowledges recent reforms aimed at addressing issues that had been discouraging PE investment in Taiwan. These reforms include amendments to the Company Act and Mergers & Acquisitions Act, as well as Financial Supervisory Commission regulations permitting securities companies to invest in PE and venture capital funds through subsidiaries.
The treatment of two major acquisition cases in the past year also represented important progress. KKR & Co. received approval to acquire a majority stake in LCY Chemical Co. via a “‘take-private” transaction, and Morgan Stanley Private Equity Asia was permitted to acquire a controlling interest in Microlife Corp. These deals injected needed capital into the acquired firms, which occupy important roles in Taiwan’s petrochemical and medical device industries respectively.
Further action to advance PE in Taiwan would significantly benefit the economy. According to McKinsey’s 2018 Global Private Markets Review, the more than 7,700 PE firms in the world held a record amount of uncommitted capital of approximately US$1.8 trillion as of 2017, including about US$130 billion in Asia. Taiwan has much to gain if more PE investment capital flows into its economy. While Taiwan is not short of capital, international PE investment brings additional advantages not otherwise easily gained. PE provides enhanced and focused global management best practices to build the capacity of Taiwanese enterprises, and it brings regional and global linkages that can help Taiwanese firms expand beyond the local economy.
Like the Taiwanese society at large, Taiwanese companies are aging, with many founders now nearing retirement. PE offers a pathway to build institutions and provide succession planning for enterprises where succession remains an open question. By solving the succession question, PE can help ensure that many great enterprises built in recent decades will continue to prosper and contribute to Taiwan’s economy long into the future. Ensuring that Taiwan remains open to international PE also raises standards and increases the competitiveness of domestic PE firms, improving their own prospects to expand into adjacent markets.
The Committee offers the following recommendations as ways to continue the positive trends evident over the past year.
Suggestion 1: Provide more clarity on remaining issues that may be potential obstacles to PE investment.
The Committee would like to continue its dialogue with Taiwan’s investment and financial authorities with the aim of identifying obstacles and seeking solutions to enhance opportunities for domestic and international PE funds to contribute to Taiwan. The key issues needing greater clarity include:
The PE Committee looks forward to the government’s views on these matters and will be pleased to be a resource for the government in what the Committee sees as our shared objective of fostering investment to build a more prosperous Taiwan.
Suggestion 2: Make a greater effort to attract projects from large-cap international PE firms.
Until recently, large-cap international PE firms, which typically focus on bigger deals and more mature companies that may already be publicly traded, have at times faced challenges obtaining necessary regulatory approvals in a timely manner, such as for equity market de-listings. This situation has impeded the inflow of large-cap investor funds that could otherwise assist with restructuring and re-energizing mature Taiwanese companies to position them for renewed long-term success.
Failure to attract large-cap international PE funds has placed the Taiwan economy and its companies at a disadvantage compared to its competitors. Data from the Asian Venture Capital Journal show that for the three-year period of 2015-2017, Taiwan attracted a total of only about US$1.4 billion in international PE funds. This figure compares to around $18 billion for Hong Kong, $29 billion for Singapore, and $36.8 billion for South Korea. Even many less-developed countries are faring better than Taiwan, including Malaysia with around $3 billion, the Philippines at $2.2 billion, and Vietnam at $1.8 billion.
Suggestion 3: Encourage the opening of Family Investment Offices as an important part of the PE ecosystem.
The creation of offices dedicated to managing the investments of a single wealthy family or group of families is an increasingly common trend – complementary to PE – both globally and in Asia. Many traditional hedge fund operators have closed their funds in order to open family-office types of investment vehicles. Given Asia’s ability to attract capital from around the world, some of these family offices are moving into the region, most often to Singapore and Hong Kong. Taiwan, with its large number of family-owned enterprises, is also seeing a similar trend domestically as well-to-do families open offices to manage their wealth and make investments.
The Committee looks forward to working with Taiwan’s regulators to develop an environment that will both attract international family office funds to invest in Taiwan and assist Taiwanese family offices to better understand important trends and operate more effectively.
本委員會感謝政府不僅與企業持開放對話的態度,並透過修訂公司法、企業併購法以及金融監督管理委員會相關規定,去除私募基金在台投資的障礙,並允許證券公司透過子公司對私募基金與創投基金進行投資。
過去一年內政府核准的兩項重要併購案反映出政府對私募基金在台投資的重要進展。科爾伯格-克拉維斯-羅伯茨獲准以購買後再下市的交易方式,取得李長榮化學工業的多數股權,摩根士丹利私募股權亞洲則獲准買下足以控制百略醫學科技股份有限公司的股權。這兩家在台灣石化與醫療器材產業占有重要地位的公司,藉由上述併購案取得它們需要的資金。
藉由進一步行動推動私募基金在台灣發展,對台灣經濟將大有助益。根據麥肯錫公司發表的《2018全球私募市場回顧》,2017年全球逾7,700家私募基金業者共持有創下新高的1.8兆美元未承諾資本,其中約1,300億是在亞洲。如果私募基金的投資流入台灣,台灣將可明顯獲益。台灣雖然不缺資金,但國際私募基金投資可以帶來無法輕易取得的好處。私募基金提供強化且聚焦的全球管理最佳做法,可為台灣企業建立能量,並導入可幫助台灣企業拓展超越本地經濟之區域與全球連結。
如同台灣整體社會,台灣企業也正面臨老化、企業創辦人接近退休的年齡。私募基金提供建立機制並為接班問題懸而未決之企業提供接班計畫途徑。藉解決接班問題,私募基金可幫助確保許多在過去數十年間建立的重要企業得以繼續繁榮發展,為台灣經濟做出長遠貢獻。確保台灣持續對國際私募基金開放,也可使標準提高,提升台灣私募基金業者的競爭力,改善它們的前景,並往鄰近國家拓展業務。
本委員會提出以下建議,做為延續過去一年正面發展趨勢的方法。
建議一:進一步釐清可能成為阻礙私募基金投資的議題
私募基金委員會希冀持續與台灣投資及金融主管機關對話,以找出障礙並尋求解決之道,以提升國內與國際私募基金為台灣做出貢獻的機會。需要進一步釐清的重要議題包括:
私募基金委員會期待瞭解政府對於這些議題的看法,且樂意成為政府在這方面的徵詢對象。本委員會認為,我們與政府有提升投資以建立更繁榮台灣的共同目標。
建議二:更加努力吸引大型國際私募基金業者來台投資
大型國際私募基金業者多專注於金額較大的交易以及已經公開上市的較成熟企業,直到不久之前,此類業者想快速取得監管單位,對其從資本市場下市的許可仍面臨挑戰。這個情況阻礙了大型投資基金的流入,這些大型基金原可協助企業進行結構調整,並使成熟的台灣企業獲得新動能,以便取得再次獲得成功的有利地位。
未能吸引大型國際私募基金,使台灣經濟與台灣企業處在相對於競爭者較為不利的地位。《亞洲創業投資期刊》資料顯示,從2015到2017的3年期間,台灣吸引到的國際私募基金投資僅14億美元,香港在同期吸引的國際私募基金投資達到180億美元、新加坡290億,南韓更達到368億。連發展程度不如台灣的國家在這方面的表現也優於台灣,例如馬來西亞有大約30億美元,菲律賓22億,越南18億。
建議三:鼓勵成立家族投資部門,做為私募基金生態系的重要環節
成立部門為單一富有家庭或多個家庭管理投資是越來越普遍的趨勢,它可以在全球和亞洲補強私募基金的業務。許多傳統避險基金業者已經將其基金關閉,以便成立投資部門為這些家族企業做投顧。由於亞洲具有從全球吸引資金的能力,部分家族投資部門正在開拓亞洲市場,目前多以新加坡和香港為目標。有許多家族企業的台灣也出現類似趨勢,富有的家庭會成立部門,專責管理財富並進行投資。
台北市美國商會私募基金委員會期待與台灣的監理機關共同努力,建立可吸引國際級家族部門基金到台灣投資的環境,同時又能協助台灣的家族投資部門更加瞭解重要投資趨勢並提升營運效率。