SINGAPORE, May 28, 2012 /PRNewswire-Asia-AsiaNet/–
Private Equity Exits are on the Rise in Asia: Marsh
Increased demand for warranty and indemnity (W&I) insurance from private equity firms heralds a new wave of investment activity as private equity firms look to exit investments made during Asia’s buyout boom of 2007, according to a new report published today by Marsh.
According to Marsh’s report, Dealmakers Turn To Warranty and Indemnity Insurance To Mitigate Deal Risk( http://www.marsh-asia.com/pdf/2012/WII_REPORT.pdf ), an increase in demand for W&I insurance has accompanied a resurgence in M&A activity so far in 2012 and sets the scene for even more activity in the second half of the year. Warranty and indemnity insurance (W&I insurance), an insurance product relatively new to Asia, is gaining popularity as the preferred tool to protect the interests on both the sell side and buy side of transactions.
“In the first quarter of 2012 in Asia, Marsh received as many requests for W&I insurance as the whole of 2011,” said Josh Roach, Asia Leader for Marsh’s Private Equity and M&A Services Practice. “This growth in demand reflects a more risk-aware approach by investors than during the boom years of 2006 and 2007, as sellers look to minimise their liability upon exit.”
“We are seeing two distinct deal trends in Asia. The first is increased deal activity within Southeast Asia, such as Singapore-based investors buying and selling assets in Malaysia and Indonesia. The second is an increase in outbound M&A activity from China and Japan, with companies looking to buy opportunistic assets in Europe.”
During share and asset sales it is common for the seller to provide warranties to the buyer on a broad range of matters about the target, such as title to shares, property, employment, tax, intellectual property and other commercial matters. W&I insurance (also know as ‘Reps and Warranties’ insurance) is an insurance solution which provides recourse against breaches of the warranties and indemnities being given by the seller in the sale and purchase agreement.
About Marsh’s Private Equity and M&A Services
Marsh’s Private Equity and M&A Services is a dedicated team of specialists focused on the risk and insurance issues that influence negotiations and the long-term financial success of a transaction. Established for over 20 years, our global practice of over 130 professionals has advised on over 10,000 transactions around the world. These transactions include mergers & acquisitions, divestments, infrastructure investments, public to private partnerships (PPPs), private finance initiatives (PFIs), privatizations and structured finance transactions.
Marsh( http://usa.marsh.com ), a global leader in insurance broking and risk management, teams with its clients to define, design, and deliver innovative industry-specific solutions that help them protect their future and thrive. It has approximately 26,000 colleagues who collaborate to provide advice and transactional capabilities to clients in over 100 countries. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies( http://www.mmc.com ) (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 53,000 employees worldwide and annual revenue exceeding $11 billion, Marsh & McLennan Companies is also the parent company of Guy Carpenter( http://www.guycarp.com ), a global leader in providing risk and reinsurance intermediary services; Mercer( http://www.mercer.com/home ), a global leader in human resource consulting and related services; and Oliver Wyman( http://www.oliverwyman.com/index.html ), a global leader in management consulting. Follow Marsh on Twitter @Marsh_Inc( http://twitter.com/@Marsh_Inc ).
SOURCE: Marsh (Singapore) Pte Ltd