| HONG KONG, June 12
HONG KONG, June 12 Providence Equity Partners
has lost another top executive in Asia, its fourth senior
departure in the region since 2008, as it struggles with a
limited supply of suitable investment targets and a shrinking
volume of Asian private equity deals.
For Providence, the supply of companies is particularly
restricted because it focuses only on tech, media and telecom
Patrick Corso, a senior managing director, has stepped down
as head of Providence's Hong Kong office, people familiar with
the move told Reuters.
The reasons for the U.S. buyout firm's turnover at the top
in Asia are unclear. The Rhode Island-based firm has had a
relatively low profile in Asia - especially outside of India -
compared with its global peers, at a time when a dearth of asset
sales has tended to give an edge to funds with a broader focus.
Providence's Asia shake-up also revives a debate over
whether private equity firms in Asia are better off pulling
money from a regional fund or from a global one.
"Regional and country funds allow private equity firms to be
more nimble and flexible on investments, and create local teams
with specialist knowledge on markets," said Jon Parker,
principal, transaction services at KPMG.
Corso's duties will be divided between Tao Sun, who will
oversee Greater China, and New Delhi-based Biswajit Subramanian,
who will be responsible for the rest of the region, one of the
For a private equity firm, continuity in the top ranks is
critical, as it helps to win the trust and support of potential
investment partners and corporate executives.
Providence Equity was founded in 1989 by Brown University
graduate Jonathan Nelson, who remains in charge. The firm is
investing a $12 billion global fund, which it says is the
largest sector-focused fund ever raised.
Providence and Corso declined to comment. Corso has gone on
to launch his own private investment company, said the people
familiar with the matter, who declined to be identified as the
information is not yet public.
PRIVATE-EQUITY DEALS FALL
While Providence has built a successful franchise, with
several big-name investments including Warner Music Group and
Univision Communications, its Asia track record is, by
comparison, more modest.
Its last Asian deal was an investment in an Indian
electronics and appliances e-commerce company, StarCJ, in
December 2012. In March 2012, it bought a stake in Hathway Cable
and Datacom Ltd, a cable broadband provider in India.
Providence's other Asian investments include India's Idea
Cellular Ltd, Australia education company Study Group,
and Hong Kong's largest broadcaster, Television Broadcasts Ltd.
Corso's exit is the latest in a series of departures by
senior Asia executives that have dogged the firm for years.
Providence announced the hiring of Andrew Rickards as a
managing director in January 2007, selecting the former Asia CEO
of Rothschild to head its Hong Kong office. Subramanian was
appointed to his New Delhi role around the same time that
In April 2008, Reuters reported that Rickards had left the
firm. Providence's China dealmaker Sean Tong left in 2011 to
join private equity firm Boyu Capital. Michelle Guthrie, another
managing director in the Hong Kong office, who also held a
senior role, left in 2010.
The departure of Corso, a 10-year veteran of Providence and
former investment banker with Morgan Stanley and Credit Suisse
in London, comes as private equity-backed M&A volume in the
region is falling for a second year in a row.
First-quarter private equity-backed Asia-Pacific ex-Japan
M&A fell 9.8 percent from a year ago to $5.1 billion and is down
48 percent from the 2011 high of $9.8 billion, according to
Thomson Reuters data.
Even in a tough environment, however, U.S. private equity
firms Carlyle Group, KKR & Co and TPG Capital
have managed to secure big investments in Asia through
regional funds, earning huge profits from a handful of choice
Sector-specific buyout firms such as Providence and
tech-focused Silver Lake Partners LP, both investing in Asia
from global funds, have not seen the same flow of deal activity
that their competitors have.
KKR, which arrived in Asia around the same time as
Providence, has 10 portfolio companies in China alone, according
to its website. Silver Lake has scored one major Asian
investment, scooping up a stake in China's Alibaba.
"Global funds can be difficult if you have to continually go
to an overseas investment committee for approval," KPMG's Parker