The Future of Dealmaking: Asia Pacific

Good morning. Good afternoon, everyone. Let's give it a minute more for everyone to join us before we start off the session. OK. Good morning and good afternoon, everyone. Again, my name is Juventi from SS&C Intralinks and we're very excited to welcome you to the Asia Pacific edition of the Mutual of Filmmaking Revenue series hosted by SSSC Intralinks, where we dive into the trends and opportunities for M&A dealmaking and private equity. Before we start, we will like to share some housekeeping matters with you.

This platform is actually customizable according to your preference. You will see a media box in the middle of your screen and you will be able to adjust the screen to a size that you are comfortable with. So you can also see that there is a box on the left side of your screen and it's the 2025 APAC Dealmakers Sentiment report, which is available for download if you click through it. And at the end of the session, we will have some time for Q&A. So feel free to put your questions into the box at the bottom of the screen at any time during the panel session.

All questions post are confidential and we will get to your questions in the order which they are received. And we have a very exciting panel of experts today. And I would like to introduce you to the moderator of the webinar today, Mr. Misha Mulligan, Country Soles lead for SSC in Trolling Japan. Over to you, Misha. All right, once again, welcome to our annual webinar series, The Future of Deal Making. Hope you're all hanging out to your seats in a pack. I believe we're in season 3 now. This is our third installment, so who knows, maybe a few more of these and we'll have our own Netflix series or something.

But thank you all again for joining us. And my name once again is Misha Mulligan, Director at Intralinks and country lead for our team in Japan. I will be your host moderator, surprise, surprise. And I'm very excited because we have an amazing group of speakers on the panel today who will be sharing their thoughts and advice on the M and A market as we navigate 2025. Before we get started, I do want to take a moment and properly introduce our panelists, if I may. Our first guest is Tim Miles, founder and Principal of Miles Advisory, based out of the Anzac region. Tim has worked in corporate finance since 1997 and in 2002 founded Miles Advisory Partners, which specializes in the mid market.

Since the firm's found, he's LED more than 100 successful private public transactions. So good to have you with us, Tim. Thanks for coming. Thank. You Next up we have Young Tsai, who is a Managing Director within the M&A Investment Banking team at City. Young is based in Hong Kong and specializes in public M&A with a focus on Greater China and is also responsible for the sell side M and a business across APAC. Thanks for joining us, Young. Thank you so much.

All right. And last but not least, we have Akshay Pradeep, Executive Director and Solution Partner at Standard Charter Bank. Akshay is based in Singapore covering the Southeast Asian markets, has 14 years of M&A experience across various sectors and specializes in complex cross-border transactions. Good to have you. Thanks for. Having me. All right, so there you have it folks. For all the viewers, you're in good hands. We have a very accomplished group of advisors who cover different core regions, as you heard, giving us a relatively balanced representation of APAC overall.

So without further ado, I'd like to stop talking and pass the mic over to our experts. Let's let's start with, you know, a sort of an easy warm up question and I always like to start and end on a positive note. So, so in that spirit, what what excites you all most in 2025? We're already a month and a half in, but are there particular sectors or regions where you see the greatest opportunities emerging Young, let's start with you. What are you seeing in Greater China? Excellent. Thanks again for for inviting me.

So 33 trends that I wanted to share with everyone on this panel. Number one is Japan emanate. There has been a pro growth probusiness agenda in Japan, reforms from the METI and the Tokyo Stock Exchange has been a catalyst, you know, for deal making in in the region. Especially there's a desire for Japanese this go to increase valuation, for example, below one times price to book companies. They have to issue and discourse plans to improve the capital efficiency. And just a fun fact, if you look at all the Tokyo stock agents, this company, about half of these companies are below book right.

And then boards are more accountable to maximize share this value and those. So that's why you see a lot of you know those all spin offs an acquisition. So that's make that makes Japan the perfect ground if I may for sure the activism, activism and unsolicited M&A, the biggest one as we all know is Kushtale's bids for 79. So this has been reflected in the overall M&A volume where you know Japan M&A volume accounted for 20% of the region's total revenue. And in fact a lot of clients you know, in this region has launched both hostile and friendly, took overs on Japan discos.

And just a few weeks ago we helped actually our talent client is media to do the first ever acquisition of a Japan disco incorporated in the US. So that's the first trend. Second trend which I'm really excited about is sponsor M&A. As you know, in our region, in the Greater China region, it's been quite tough for sponsors to, to exit, But I think this year they'll be more motivated to deliver exits. And you know, there's a, a big focus on, on DPI. So I think this year there will be a lot of pressure to, to, to deploy capital and that in China, for example, a lot of our clients are also looking at assets in Southeast Asia and they're also trying to pivot from a China focus fund to the Pan Asia focus fund.

And then just to finish off very quickly in where where I sit in Hong Kong is the Hong Kong take private activity. So 24 we've seen a surge in tech private deals in Hong Kong driven by you know this broader recalibration of corporate strategy in response to, you know, all this geopolitical tension and the soft Chinese economy. So just to get a sense deal value in 24 is double that of 23. And you know, we were part of the biggest tech private in ESR last year and I think that this trend is going to continue. So All in all, I expect a very, very busy year.

Thank you, Young, and thank you for that plug on Japan. Obviously that's close to my heart being based here. Tim, what are you seeing in the AIDS that region? Well, first of all, thank you very much for inviting me to join you. I, I have to agree with Young. First of all, a lot of Australian M&M and I activity, excuse me, M and I activity is cross-border and we think Japan will be a very exciting part of that over the next 1224 months. One of the reasons is for the first time in 30 years, Japan's returned to economic growth.

And so that's going to make an an incredible difference in M&A appetite. Interest rates a minute, interest rates have finally moved off 0. So we, we, we think that what we're going to see in, in cross-border transaction is a, is a significant increase from Japan. And we, we've completed 2 transactions in the last 18 months worth 14 months with Japanese suitors. So we're, we've so 1 to Kihatsu and one to Sumitomo. So we're seeing a significant increase from that, from that part of the region, but also think that we're going to see a lot more activity from, from private equity.

There's obviously been quite a large prevalence of continuation funds coming into the market for the star assets, you know, to to allow PE firms to continue to hold their vehicles for longer. And I think even a firm is going to have a larger role to play and what happens with continuation funds. But we're also seeing a lot of funds who want to go out and and raise money and to raise money, they've got to show that they can invest well and exit well. So I think we're going to see a lot more exits from the PE fraternity in the next wee while, particularly because a lot of their assets that they acquired prior to the pandemic, they've had to hold through the pandemic.

So they've had them for a longer hold. We're now long enough out of the pandemic that people can see a, a, an appropriate earnings trend and, and can find those businesses easier to understand. So I think we're going to see over the next 12 to 24 months significant uptake in any exits from the from the PE fraternity. And from a, from a sector point of view, I think consumers probably the sector that will, will, will stay subdued, but that's because of consumer sentiment. And so you know that that that that sector's probably going to struggle the most, but we're seeing a lot of activity, business services, healthcare in particular.

Got it. And I'm glad you mentioned private equity. We, I do want to kind of dig into that deeper if we have time later. Akshay, what about in Southeast Asia? Thank. Thanks, Misha. So I think Young and Tim made some very good points which are equally applicable to the Southeast Asia region with private equity exits being held up and likely to come to market just because of the pressure to return to LPs. I think you also mentioned, you know cross-border China diversifying into Southeast Asia.

That's a very strong trend that we're observing. A lot of Southeast Asian countries, including Malaysia and Vietnam, have been beneficiaries of that trend. Indonesia has kind of stepped up its ambitions to move from a commodity player to commodity processor. So there's been a lot of investments from Chinese companies within that segment. I think Young made a very interesting point about reforms in the Japanese stock market. I get the sense that there are a lot of different regions looking at sort of that label to see if it can be applicable to their countries. For example, in Singapore, where I said the Stock Exchange performance and sort of the underwhelming performance that the Stock Exchange has delivered has led to some thinking about, you know, can we replicate some of these, you know, name and shame practices that that has worked so well in Japan where you kind of force companies to layout plans for returning capital and for, you know, improving capital efficiency and profitability?

We do, we do see a few companies for example, going ahead of the curve, for example, Singtel in Singapore and capital, they've all made very public announcements on divesting non core assets and kind of returning capital back. And I I suspect that this is an ongoing trend that a lot of other countries will kind of see how you can put pressure on the list course to kind of improve shareholder returns and and one sort of fall back fall out of that would likely be more MNA. Got it. All right. Well, it's, it's great to hear, you know, sort of all the the spotlight on Japan.

I think a lot of people have, you know, thought that it's been undervalued for quite a long time. So it's good to hear that those reforms are sort of, you know, resonating. Thank you all for sort of, you know, building that positivity up given the previous few years. It's it's it's good to hear that there's a lot to look forward to in 2025. Having said that, let's turn to a theme that's likely front and center in everyone's mind. The elephant in the room, shall we say, with President Trump, you know, back in office and his administration signalling return to more aggressive trade policies, uncertainty around inflation, interest rates and geopolitical tensions is growing, especially with China.

That's a lot to to sort of pack or, or to uncover. But First off, what sort of impact will this have on financing conditions, if any, here in APEC? Tim, let's start with you. Thanks. Look, I think the short and the long term will be quite different over the next, you know, let's call it six weeks to three months. I think everybody's going to wait to see how much of the rhetoric is actually going to result in policy. You know, a lot of it's going to be the, the, the art of the negotiation.

So a lot of what he's putting forward, I don't think he believes will be his final position, but it's, it's to assist him to negotiate to a point. So I think what we're seeing definitely seeing at at at the moment is a fear about if these policies take hold, will it create inflation, will it's stop the downward pressure on interest rates etcetera. And people are pausing while they wait to see what what impact that will have. But I think the general view is in the long term, a lot of what he has to do, particularly his, the fact that he, he, he will be assertive in the way he tries to end some of the conflicts that we've got globally.

And, and I think people will see, will see that as a positive for the macro environment. So in the short term, we're definitely gonna see people just being cautious waiting to see how we're gonna have inflation is particularly within the US because the, the tariffs etcetera that he he's introducing, it is highly likely to create inflation, inflationary pressure within the US. So I think there'll be a cautious pause over the next six weeks to, to three months. But I think in the long term people will return quite aggressively to to deal making. Yeah, definitely not until we're expecting a, you know, end of last year actually.

What about you? What are you seeing? Yeah, No, Tim made some great points. I think just to add to that, short term, I think for sure it's it's going to be, I think a stronger dollar, tighter financial conditions in in most of AIPAC. I think that's just reality. I think the long term view is key. And I think there's some hope that the bond market will act as sort of a sanity check on everything that President Trump is trying to do. You know, we saw this happen in the UK before where Liz Trust said it tried to do certain fiscal moves, which, you know, the bond market reacted quite sharply.

And when those costs started going up, you she had to kind of back off. And, and in that particular instance, it really, it resulted in a change in, in the government then. So it, I, in some sense there is there's a hope that eventually, once these debtors really start to hit inflation, interest rates, borrowing costs go higher, President Trump would then start to kind of probably ease off, which which means it's some breathing room for financing costs. The second point I'd make is I think the current uncertainties around interest rates are quite good for bespoke credit solutions. We're seeing quite an explosion in private credit solutions, which was kind of an asset class that didn't even exist maybe 20 years ago.

It's, it's now 10% of all bank credit in the US and it kind of rivals the high yield bond market in terms of a source of financing. We're seeing definitely a lot of funds showing interest in Southeast Asia, in India especially, and that's becoming an alternative channel for financing some of these large deals. Interesting. So private credit definitely something we'll look at young. What about you? Yes, I, I, I think back to just to pick up on anxious points a lot of private credit activity and especially right the the US market. If you look at some auction processes, a lot of financing came from private credit versus the typical LBO loans.

But I think the in if we would take a step back right and look at the the impact on Trump's trade policy etcetera. I think for sure it will strengthen the US dollars. But with the the tariffs it would have a broader implication on M&A. Because you know every time we talk to a client, they understand that everything is flux. But one thing is sure is that they need to live under the wall of uncertainty and they understand the need to be to be our job. So one example is so, so put on President Trump introduced this tariffs and even though there's a 30 day delay on Mexico, we already have townies clients, they have a manufacturing base in Mexico.

They're already calling us and say, hey, can I buy an asset in the US because it's all about on showing now. So even though there's a lot of rhetoric geopolitical, but I think from the corporate perspective they are trying to to play defense. And then you know if if you zoom in on you know what does it mean as M&A practitioners right in terms of deal negotiation etcetera. So on, on deal terms, for example, on, on buy side deals in my region, it's very hard for Chinese buyer to be in pole position for US assets, especially on the on the auction processes.

Because seller now in addition to price, they also view regulatory risk certainty closing as very important. So that's why on the SPF fronts, you know, we spend a lot of time talking about reverse termination fees, the trigger of such fees, what are the remedies and mitigate for example, if regulator imposes certain conditions before closing. So as a standard, you know, from the seller's perspective. You know hell or high water clauses will be done default position. And then last point I want to make is another consequence of this whole geopolitical environment is the elongation of timing between announcement and closing. Now this may have an impact on financing, but the the bigger risk especially is on public takeovers where it makes an interloper easier to come in unless the initial buyer has secured and the voting support from the targets many shoulders.

So it's very interesting. It changes, you know, how you negotiate deals, but but again, everyone is kind of waiting and seeing how the tariffs, the policies will will impact your making. Yeah. No, no, thanks for that context. And Young, I'm, I'm glad you brought up the sort of the deal term aspect of it because that's kind of where I wanted to go next. So, you know, just to stay on this topic and as a follow up question to Takshi and Tim, you know, how will these factors that we sort of talked about Trump's policies, the interest rate outlook and geopolitical tensions, you know, how will these factors influence valuations and deal term structures going forward?

Actually, maybe we could start with you. Yeah. Sure. So on valuations, the 11 interesting phenomenon that we've observed is sort of regardless of kind of the tariff posturing the the Fed rates, the Fed rate cuts that are that are sort of being announced and are likely to come through. The 10 year bond yield has kind of settled into this, you know, call it 4 to 5% bucket where where it's kind of been in that that zone, which just tells me that it is likely to push people to kind of accept that the risk free rate is now you know, changed from what it was previously.

And even if rates are going to come through, the view is rate cuts are going to come through. Sorry, the view is that the long term interest rates are kind of going to be around that 4 to 5% mark, which probably might be a factor in reaching sort of the valuation gap between buyers and sellers. If there's now a consensus around what the risk new risk free rate and the new normal is it it might help bridge valuation gaps and might help close deals in terms of deal structuring. You know, completely agree with you. There's there's been a lot of focus when negotiating deals around risk, risk mitigation, risk transfer.

One product which has really caught on is the warranty and indemnity insurance, which increasingly you kind of see a standard in a lot of transactions. And while initially the focus was sort of an unknown risk, you know as the product becomes more sophisticated, you do see insurers selectively coming in for even known risks. So I think that instrument as a way to kind of risk mitigate risk transfer will probably become very key in, in sort of the coming months. And we're also likely to see more contingent payments on out kind of structures to again do these kind of risk transfers, value transfers in uncertain environments. All right.

Thank you very much for that. And Tim, what about your views on this? It's interesting, I think it really does depend on the region and, and and the sector. You know, in Australia we're we're relatively isolated from a lot of what the policies happening in the US They don't necessarily impact Australia much with the exception of how they will change the interest rate environment. Obviously for cross-border as the US dollar gets stronger relative relative affordability changes for for business with businesses within Australia. And so that will have a a knock on positive, positive effect on on deal flow. I think that will be offset a little bit by the fact that the interest rates aren't going to come down quite as, as quickly as they were.

I think the biggest thing is within a deal or process construct, if you can create enough competitive tension, then the valuation outcome solves itself. And, and I think to the extent that the policies being introduced in the US lower the amount of competitive tension we can have in a, in a process because we don't get participants from China or, or, or other other regions that could have a bigger impact on, on valuation than interest rates or, or the like. But at the moment we're not really seeing that. I I believe that that it it will be a net positive. Understood.

Well, thanks very much for that. It's very interesting. And I, I, I also just being cognizant of any Q&A that's coming in Javeen, are we getting any Q&A at the moment? Yeah, we have a couple of questions. But do you want to go on 1st? Then we we can have the. Questions at the end? Sure, sure. I'm not seeing them in my inbox or just FYI. OK. OK.

And, and, and just kind of continue on with the discussion that we're having and Tim, maybe I'll, I'll, I'll stick with you. You know, we just talked about policy changes in the US, but are there any policy or regulatory shifts in AIPAC? The deal makers should be, you know, paying close attention to in the coming year. I know that in Australia there's a lot of developments happening. Yeah, certainly. I mean, we've already talked about what's been going on in Japan, but in Australia the, I've announced a, a tight, a tight of antitrust regulation through what it's called the A triple C.

And in Australia and I see that as being a, a real restriction on deal, deal flow in the, in the coming. The, the, the changes will mean that we're today roughly 20% of M&A transactions end up having to go through the A triple C. It'll probably flip to where roughly 80% of transactions will have to go through the A triple C. I don't think the approval rate will change and I think transactions will will continue to get done. But I think what's going to happen is the, the delay between signing a transaction and completing a transaction is going to become an awful lot longer.

And you know, it hasn't really been getting a lot of press in Australia. When it first came out I thought, well, the, the one knock on benefit from that will be people rushing to get a deal done before the new legislation comes in. But that hasn't that hasn't happened. What they actually will see are trying to to prevent is the large conglomerates from being able to go and affect a bunch of a series of small transactions that flew underneath their radar. And so that's why they're trying to see the vast majority of the transactions.

And really what they're doing is they're taking away the incentive for a challenger. You know, so you've got a small entrepreneur who decides I'm going to start this business up because I know once I get it to a certain size, I've got a, an exit path for it. That exit path has become less certain because of the a triple C's intervention. So I don't see it as a, as a positive move. I think it's really going to put a lot of timeline delays and transactions and a lot of uncertainty because, you know, we'll, we'll end up in a situation where you, you start to think, well, this better may not get through an A triple C review, but this better definitely will.

And so it's going to be very hard to and competitive process processes to look at like for like bidders because there's a, there'll be a degree of regulatory risk that sits alongside it. Yeah. Well, thanks for sharing that. And hopefully, you know you'll see more deals this year as people try to jump in before the regulation takes effect. Fingers crossed. Fingers crossed. I have one point about regulatory changes probably not emanating from Asia, but there's something that we call reverse, reverse Cephas program.

So what that is, it's a, it's a new initiative by the US, you know, and the point is to restrict outbound investment from the US to namely China, Hong Kong and I think Macau and I think most of us have heard of Cepheus, but what reverse Cephas is. So basically Cepheus is scrutinizing inbound M&A into US, whereas previous Cepheus is the other way, right? It's basically outbound investment into let's say China, for example, right? So it's basically the US way to have a more proactive approach to ensure that, you know, US investments or US money don't enhance the capabilities of what what they say, you know, the competitors or, or China, right.

And so the tiger sector, it's streaming sector, right, Semi quantum tech AI. So that may have an impact on deal making in this region. For example, IP, OS or the equity are raising where you know, a lot of investor are US based. So that's uncertainty and that may affect deal making this year. Absolutely. And we kind of saw those effects with Japan too, I believe with you know, US and Japan steel. So actually did you, did you want to add anything around regulations?

I think within the region, what, what I suspect would happen is that countries will identify sensitive sectors. There will be more scrutiny on, on deals happening in those sectors. In Singapore, there was a bill passed called the Significant Investments Review Bill, which specifically focused on, you know, very core national security kind of sectors where deals would require enhanced approvals. A few years ago, I think it was India that that specifically announced as an FBI approval for deals emanating from neighboring countries given ongoing tensions with China. So this I, I, I think this will continue to be a team where in certain geopolitically sensitive or sensitive sectors there would be heightened scrutiny, scrutiny.

So, you know, for clients, I think sounding out regulators where possible ahead of, you know, actually announcing deals and they're going through that regulatory channel. Is this probably a good idea? And I do want to address some questions from the audience. So we do have a question about, you know, AI affecting, you know, deal making in the tech sector. So I think in, in the opening, in the beginning, we talked about some of the trends, opportunities that we're seeing, you know, sector specific, region specific when it comes to AI, you know, how is what are you seeing in your respective regions and how is, you know, affecting deal making across the tech tech sector?

Actually, maybe we could stick with you. Sure. So at least in in South and Southeast Asia, I don't think there is sort of the primary AI type companies that are actually sort of leading the way in engine AI, we're seeing more 2nd order effects. So it's kind of the supporting infra that's required for AI. So that's data centers, digital infra, fiber, all of these are kind of areas where there is a lot of activity happening and there's kind of 1/3 order effect happening where these data centers are very power intensive. So you there's also a need to kind of shift to green energy.

So renewable energy and renewable power to support kind of the energy consumption of data centers is I think a big theme. There's also, for example, I was reading in Malaysia where I think there's something like 50 data centers currently approved for, for construction there. They're actually worried about the water that's used to cool the data centers essentially running out of drinking water. So there's probably on the utility side, on the infra side to support what is the enhanced consumption coming out as a result of use of AI. Think that's likely where we will see deals in in this week.

So a lot of activity in the AI you sort of supply chain, Tim Young is, was there anything else that you wanted to add on that topic? No, I think that's exactly right. It's not the AI businesses themselves, it's the knock on impact of of AI. So there's the infrastructure as I say, you know points out and it's an incredibly good point, but there's also the impact on other business lines of business services. So you know, if you're a SAS business, for example, and your charge model was a, a fee per seat, as AI it's more and more prevalent and starts to reduce headcounts that has a knock on impact to SAS firm's revenue.

So you'll see SAS businesses starting to try and change their charging model away from a per seat model into a data usage or, or, or something similar. So it's, it's having an impact on across all industries, but it's not AI itself isn't creating M&A opportunities for AI firms. It's more making sure that you're aware of the impact that AI has on on some on a business that you're looking to acquire or so. Yeah, absolutely. Young, we do have a question specifically for you, a new question in the context of sort of Chinese businesses on US public markets.

Do do you expect to see a material increase or reduction of IPOs or take private, take privates. Yeah, I know It's a it's a very interesting question. The tech private theme has been gone on for a while because as you know, there's a lot of what we call some orphan stocks, so AUSADRS of Chinese companies. So we see more and more in that and then those are mainly either founder LED or P LED consortiums. So we see more and more of these M and as being executed and then the the whole rationale is that, you know, there's a mispricing or or undervalued theme. So the playbook usually is just to take private from the US exchange and then do a trade sale or VIPO it in in Asia on on the IPO front, there are still a lot of USIPO activity going on.

We see quite a bit of activity on the healthcare biotech sector in the US, but given the, the, the geopolitics, I think there's more and more companies are choosing to do IPOs in Hong Kong. And a quite prominent trend on the IPO is this HA plus HIPO i.e companies already traded on the Asia, now are looking to list on the Asia. So there's a big backlog of such billion plus deals going. Got it. Thanks for that. A lot going on in China. I want to get into another topic which was mentioned earlier, private equity.

So you know, given all the things that we've, you know, just discussed so far, you know, ranging from geopolitics, you know, capital costs, regulatory shifts, how how are these dynamic shape deal making strategies in the private equity space specifically, do we foresee a rise in secondary transactions and alternative exit strategies as far as navigate these challenges? Actually, maybe we can go to you first. Yeah. No, I think absolutely. And I think that's, that's really a function of, of the struggles that we have had with exits. So in 23 and 24 P exits were sort of a decade loss, right.

And you know, in a, in a typical year, sort of the makeup of M&A deals is 60% corporates and 40% private equity. In the last couple of years that's been you know, private equity at 20 to 30%. So they're definitely below the levels at which you would see PE deals. And I think that it's just a matter of time and eventually you, you do have solutions, which kind of are intended measures. You have continuation funds, you have secondary transactions. All of these have been used. But, but I think it's, it's eventually push will come to shove and where people will try and, and make more transactions happen within sort of my patch of the world.

I'd, I'd call out one market as being an outlier, which is India where sort of last year it was the second largest IPO market in the world, something like $20 billion in public market listings. And these have increasingly taken that route to exit quite, quite successfully in high profile transactions in India. And what's also an interesting trend there is that you also have quite sizable block trades happening on the secondary stock market, which means that one issue with IPOs is that you can't exit completely and you're sort of left with residual stake in kind of the list of company. But but there's now an active secondary market for large minority stakes in publicly listed companies happening in India.

So that's just one market I'd say, which is, which is outline. No, it's good to hear some, some context from India. I, I know you previously actually were based out of India as well. So it's good to hear that context. Tim, how about you? What are you, what are you seeing in the private equity space? Well, I, I think Ashay's point is exactly right that they, their volume of exits was incredibly low for the last two years, but they also didn't look to exit either.

So it's a very different motivation set within private equity to corporates doing a divestment of it or a carve out or founder LED businesses equity. You know, with founders and corporates, a founder will will exit the business when it's got to a point where he has a need for capital and a private equity partnership will help him do that or he or she or that or they've just reached a retirement age. And so they're not being motivated by a money multiple or a return. And the same with the corporate, they'll divest something that's non core because it'll let them focus on the core and, and, and generate better returns with private equity that they are in the market constantly.

So they know when a market's depressed and when, when there's a valuation multiples are down. And so they don't look to exit at that point because they their sole reason for exiting is a money multiple to to generate a return. So for the private equity volume of transactions to lift that there has to be a, a noticeable shift in, in M&A activity and and valuations. And I think the last quarter of last year and what we're seeing at the beginning of this year, that shift is starting to come. So, so that will be one of the catalysts for for increased PE activity is just seeing that the market is coming back to A to a point where they can achieve the returns they want to out of the exit.

The other thing that has happened with private equity is. The businesses within their portfolio have all grown strongly, but they've achieved that growth and in many cases through M&A, through making acquisitions. And what that means is their equity value actually hasn't grown because as they've made the acquisitions, they've had to put more debt to use or or more more equity, more capital in typically it's more debt. And so as a result, they'll allow those to come, those businesses that those bolt ONS to achieve the synergies and then drive, drive the equity value. So I think when we do see an uplift in the M&A volume from private equity firms, it's going to be from things they bought pre pandemic rather than post pandemic and certainly in the in the near term.

Got it this. Great insights and just for the audience, me and Tim did not coordinate wardrobes. That's not true, Mr. You sent You sent me a memo, told me what to be at. Young for private equity, what do you see in the in Greater China? Yeah, it's very interesting. I, I think it's similar, similar story in the sense that in the past few years it's been quite tough for sponsor to, to exit mainly driven by the bid ask in valuation.

So you see a lot of you know, continuation funds being set up. But I think this year sponsor will be more motivated to to exit and we should see a narrowing of diversion gap given that the focus on on DPI. And then in this which is one particular trend or anecdote to share is it's really quite, quite striking to see, you know, for good assets, you know, it's still very much a sellers market where you can just drive the buyers, you can have very little to you know, condensed DD. Etcetera and then just move up the price. But that is only very, very few assets.

The majority of ones of this bonus outside the trend is that #1A less and less structured processes. And even if there's processes, the, the timeline gets longer and longer bids get bids are not that robust or buyers are not following the prescribed time frame on the process. Now there's a slight change in tactic where, you know, we engage in different streams of collared bilateral process. And so it's a more fluid, less structured Southside process and design. But I think this year and then, you know, I, I think everyone on, on this call is pretty busy. We've, we've got a lot of RF PS to, to sell Buffalo companies.

So I do think this year should be an inflection point where where we see a much more exits in the Greater China region. Got it. And thank you very much for all that. I'm just keeping track of time here. We're we only have a few minutes left. So I just I want to ask one last question at the end. Very short answer. And again, you know, I have to preface this by saying, you know, Intralinks is a technology company. So this may sound like a slightly self-serving question, but I'm going to ask anyways.

How do you all see the role of technology, particularly AI, shaping the M and A deal process and the work that you and your teams do? Young, let's stick with you. Yeah, it's very interesting. I think it's just more than a trend, it's becoming more and more essential. So it might for the business banking, right. I think, I think it will make our job even more interesting. And, and just let me explain, right, because AI can help banker, you know, on menial task or initial preparation task, like looking for the right comps, getting industry data.

And so it would alleviate the burden on junior bankers and it would for more time for bankers to spend more time on more exciting stuff like negotiation, valuation tactics, etcetera. On the the diligence fronts, you know, because of this whole, you know, natural language processing tools and just like plug for you guys, right, you know, we received different providers, you know, offering technology, you know, to automate the review of the documents. So it, you know, you can literally in the data room ask a question, you know, hey, what are the key terms of that contract and that AI assistant, I can just pop you the answer in, in in 2-3 in 2-3 seconds.

So I think, I think it's a very great tool for bankers, yes. Thanks for the plug, Akshay. How about you? Yeah, No, I I think Jung covered it largely and I think possibly one tool that I think in, in early stage, but what we've seen as once there's a practice it started possibly during the pandemic times, it kind of becomes regular market standard way quickly. For example, so much of diligence and negotiations happens remotely now and it's just taken for granted. And I think the tool of Gen. AI helping you find precedence and help you kind of get to a template agreement or help you in negotiations.

I think that's that's probably 1 trend which I see kind of picking up in the future. Thank you. And Tim, what are you, what are your thoughts on this? Well, I think the guys have covered it very well with with, with, with what they've said. Probably the only addition I'd make to that is that from a bidders perspective doing due diligence, they can go a lot deeper into the information. So I always allowing them to get a lot more data a lot quicker and a lot cheaper. And so, you know, from a seller's perspective, you, you have to match that.

You have to use the same tool to do your vendor due diligence and ask the same questions and make sure you've got the answers because you know, time kills all deals and you need to maintain momentum. And so if you're not well prepared as you start to get those questions that you don't know how to answer, then then it will put risk into the deal. So you also need to use AI in the prep phase of the transaction as well as the as well as the diligence phase. Yeah, absolutely. As you know, as more of these deals are virtual now, it does feel like it's really speeding up.

So no, thanks all for that. And we are actually just on time. So while I wish we could, you know, continue this conversation for longer, I'm afraid we'll have to end it there. So on behalf of Intralinks and everyone attending this session, I'd like to give a big thank you to our pounce once again, Tim Young and Shay, you know, really appreciate you making time for us today. And you know, I for one, you know, enjoyed your company and valuable insights. So hopefully this will be the first of many appearances to come.

Thanks, Misha. Thank you everyone. Thank you. Lastly, thank you to those in the audience for attending the session. I hope you enjoyed it and please keep an eye out for our deal Makers sentiment report which will be released in the coming month. Over to you. Thank you Mr. Akshay, team and Young for sharing your valuable insights. I'm sure there are many takeaways from today's session that our audience found useful.

And we hope you've enjoyed the Asia Pacific edition of the Future of Filmmaking webinar series. And if you would like to hear more insights from the other parts of the world, we do have more sessions available on our SS&C Intralinks page. So just now Misha mentioned the 2025 Viewmaker Sentiment Report is also available for download on the left side of the screen. And a recording of this webinar will also be made available in the coming days. And it will be sent to the e-mail address that you have used to register for this webinar. So stay tuned.

And on behalf of SS&C in showing, thank you for attending the webinar and we wish you a pleasant day ahead. Thanks for joining us.