In-house practitioners told IFLR that escrows are growing in
usage in Asia and can be used in conjunction with R/W insurance
in M&A deals. As trade tensions and political instability
grows, deal uncertainty in transactions is mounting.
Representations and warranty (R/W) insurance is gaining more
popularity in Asia, but escrows are also an option that can
bring more assurance to a deal.
In addition to trade tensions, capital controls remain an
issue in Asia, especially in China. "We’re seeing
more use of escrows for private equity funds, especially in
cross-border transactions," said Yong Kai Wong, head of special
projects at Citic Capital. "With strict capital control rules
in China, there is a need to safeguard funds for limited
partners (LPs) and escrows can help to alleviate concerns over
This demand goes to all bidders, but it's really targeting
PRC buyers, according to Brian...