[SINGAPORE] Private-equity funds are poised to take a bigger role in the region's growing merger and acquisition (M&A) market, said investment banking executives at Goldman Sachs.
"We're getting a lot more calls," said Yong Hsin Yue, Goldman Sachs co-head of South-east Asia investment banking.
"A lot more calls from private equity guys ... Just wanting to hear about the market, wanting to know what's going on, a lot of them are relocating here. They're looking to buy."
Global private-equity players were sitting on about $100 billion in "dry powder" at the end of 2012, and fund managers are chomping at the bit to use them, Bain and Co wrote recently in a recent report.
Goldman Sachs managing director of investment banking Cameron Poetzscher said South-east Asia was an increasingly attractive region for private equity, noting that a number of major houses have started to shift resources to Singapore.
"Even the ones who don't have a physical office here are spending a lot of time thinking about South-east Asia."
Ms Yong, who expects overall M&A deal sizes in the region to shrink towards the US$1 billion to US$5 billion range but in greater quantities, said most of the PE interest is in mid-size acquisitions rather than bigger deals.
That strong PE interest should help to contribute to what Goldman Sachs believes will be another positive year for M&A in the region.
Sectors that could see more M&A activity include financial institutions, real estate and natural resources, Mr Poetzscher said.
Valuations in consumer plays have become richer since the recent Fraser and Neave (F&N) takeover battle turned a spotlight on the sector, but Mr Poetzscher continued to see value in that space.
"I think there are a lot of consumer assets with strong brands that aren't necessarily owned by their best owner," he said. "It could be embedded within a broader conglomerate, or for whatever reason there's potentially another owner who could make greater use of those assets. So I do think we'll see again over the next 12 to 24 months more of those assets trade just as we saw in F&N."
Mr Poetzscher noted that the recent F&N battle, in which Goldman Sachs was advising F&N, may have increased the attractiveness of Singapore companies for potential acquirers.
"The F&N case demonstrated a lot of the important features of Singapore in terms of the regulatory and governance framework," he said, citing the handling of the takeover by the board of F&N and regulators.
"Singapore is a great launching pad for multinationals, it's a great base for them so they're very interested in acquisitions here as part of their way to expand their footprint in South-east Asia and Asia more broadly," he added.