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India’s largest engineering firm, Larsen & Toubro, plans $300 million private equity fund to invest in power

Larsen & Toubro Ltd., India’s largest engineering company, plans to create a $300 million private equity fund to invest in power, road projects in India, said N. Sivaraman, senior vice president for financial services reported Bloomberg.  Larsen’s plan follows an investment by Morgan Stanley and a group of companies that invested in utility Asian Genco Pte in India’s biggest private equity transaction this year.  Morgan Stanley Infrastructure Partners and a group of global investors will invest $425 million in Asian Genco, which is developing about 4,000 megawatts of hydro, thermal and wind power projects in India.

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Former MD of Reliance Money, Sudip Bandyopadhyay, starts finance company backed by CX Partners

Sudip Bandyopadhyay, former managing director of Indian billionaire Anil Ambani’s Reliance Money, has started a financial services company backed by private equity firm CX Partners.  Bandyopadhyay’s Convexity will offer equity broking and portfolio advisory services with a focus on derivatives, according to an e-mailed statement recently as reported by Bloomberg.  Bandyopadhyay quit Reliance Money and joined Spice Group to head its financial services business in November.

CX Partners, a $500 million buyout fund whose investors include Goldman Sachs Group Inc. and JPMorgan Chase & Co., will name two people to Convexity’s board, according to the statement. The fund is managed by Ajay Relan, a former managing director of Citigroup Inc.’s private equity arm in India.

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TPG-Owned China Grand Auto said to plan $1 billion stock offer

China Grand Automotive Group, a car dealer part-owned by private equity firm TPG Inc., hired Goldman Sachs Group Inc. and China International Capital Corp. for an initial stock sale, said sources as reported by Bloomberg.  China Grand Automotive may sell about $1 billion of shares as early as this year, probably in Hong Kong, said one of the people, who declined to be identified because the information is private.

China Grand Automotive was founded in 2006 as a 3 billion yuan ($439 million) venture between TPG and Xinjiang Guanghui Industry Investment (Group) Co., according to a job posting on Web site Alljobsearch.cn. It operates more than 100 car dealerships in the country, according to a statement in December.

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Carlyle Group raises $2.55 billion for third Asian private equity fund

Carlyle Group, the world’s second- largest private-equity firm, raised $2.55 billion for its third fund aimed at deals in Asia.  Carlyle Asia Partners III brings the total committed for investments in the region by Carlyle to $5 billion, the Washington-based firm said in a statement recently as reported by Bloomberg.  “We believe that 2010 is shaping up to be a very good year to make investments in Asia as the region bounces back strongly from the global economic crises,” X.D. Yang, co-head of Carlyle Asia Partners, said in the release.

Carlyle Asia Partners funds have made 21 investments in the region, where the company set up private-equity operations in 1999. With $88.6 billion in assets under management, Carlyle trails only New York-based Blackstone Group LP by that measure.

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Europe’s Investindustrial opens China office for expansion

Investindustrial SpA, a European buyout firm, opened its Asian head office in Shanghai recently, aiming to tap into China’s growing desire for luxury goods reported Bloomberg.  The office will have six employees, who will provide support to the company’s eight manufacturing, distribution and retailing companies in China, Chairman Andrea Bonomi said. Investindustrial plans to increase the number of companies in China to 10, helping to boost sales in the nation to $1 billion from $600 million “fairly quickly,” he said.

Investindustrial, based in Italy and Spain, is expanding in Asia through luxury brands such as Ducati motorcycles and jewelry sales as growth slows in Europe, Bonomi said.  “Eventually our goal is to IPO,” he said in a phone interview. “It would be either in China or Hong Kong or Singapore.”

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Blackstone Group is investing $50 million in the owner of an Indian newspaper

Blackstone Group LP, the largest private-equity firm, plans to invest 2.25 billion rupees ($50 million) in the owner of Dainik Jagran, the Hindi-language broadsheet that says it’s the world’s most widely read newspaper reported Bloomberg.  The New York-based firm is investing in Jagran Media Network Pvt., which holds a majority stake in Indian newspaper publisher Jagran Prakashan Ltd., as local-language publications are poised to grow.

Dainik Jagran has 54.6 million readers and prints 37 editions and more than 200 sub-editions across 11 states, according to a joint statement by Blackstone and Jagran Media.

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Red Fort Capital plans to invest up to $1 billion in India real estate

Red Fort Capital Advisors Pvt., a real estate private equity fund, plans to invest as much as $1 billion in India’s property market over the next few years to tap demand in the world’s second-fastest growing major economy reported  Bloomberg.  The firm has invested $400 million since 2007, mainly in residential projects, and may consider investing in offices, hotels and shopping malls, Managing Director Subhash Bedi said in an interview in Mumbai yesterday.

Demand for homes is picking up and Red Fort and its partners have sold 3,000 apartments over the last six months in New Delhi, Bangalore and Chennai, Bedi said. Red Fort has invested in projects with Parsvnath Developers Ltd. in the New Delhi area, and with closely held Prestige Group in Bangalore, he said.

“In India, there’s a growing middle class whose incomes are rising, the economy is consumption-led, investments come from high domestic savings and it’s a growing economy,” said Bedi. “Mortgage penetration rate is miniscule and as the penetration rate increases, more Indians will be buying homes.”

Red Fort Capital has returned an average 25 percent to its investors in each of the past three years, he said.

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Red Fort Capital Advisors Pvt., a real estate private equity fund, plans to invest as much as $1 billion in India’s property market over the next few years to tap demand in the world’s second-fastest growing major economy.The firm has invested $400 million since 2007, mainly in residential projects, and may consider investing in offices, hotels and shopping malls, Managing Director Subhash Bedi said in an interview in Mumbai yesterday.

Demand for homes is picking up and Red Fort and its partners have sold 3,000 apartments over the last six months in New Delhi, Bangalore and Chennai, Bedi said. Red Fort has invested in projects with Parsvnath Developers Ltd. in the New Delhi area, and with closely held Prestige Group in Bangalore, he said.

“In India, there’s a growing middle class whose incomes are rising, the economy is consumption-led, investments come from high domestic savings and it’s a growing economy,” said Bedi. “Mortgage penetration rate is miniscule and as the penetration rate increases, more Indians will be buying homes.”

Red Fort Capital has returned an average 25 percent to its investors in each of the past three years, he said.

Babson Capital Management to expand mezzanine finance unit in Asia-Pacific region

Babson Capital Management LLC, which oversees $118 billion in assets, will expand its mezzanine debt and private-equity investment unit in the Asia-Pacific region with an eight-member team reported  Bloomberg.  The unit, created in 1992, currently has a staff of 21 people and manages about $5 billion in the U.S.

“The Asia-Pacific region offers attractive opportunities for profitable mezzanine investing due to the region’s strong economic outlook, increasing demand for mezzanine as a source of buyout financing, and a pullback by traditional investors in the marketplace as a result of the global financial crisis,” Michael P. Hermsen, a managing director who co-heads the mezzanine and private equity group, said in the statement. He will oversee the Asia-Pacific team.

The team added Shane A. Forster and Adam H. Wheeler, previously of AMP Capital Investors, where they managed more than A$700 million ($643 million), according to the statement. Joining them in Sydney are Elliott Wong and Adrian Ng, who headed a A$200 million mezzanine debt portfolio Babson took over management from Babcock & Brown.

Hermsen’s team will also include Los Angeles-based Benjamin Silver and Asia-based Adam Nowak and Howe Wu, according to the statement.

Mezzanine financing, common in takeovers, usually involves preferred stock or unsecured subordinated debt to expand a company’s equity capital. The debt is senior to common stock and junior in the capital structure.

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KKR-led consortium to invest over $200 million in India’s Coffee Day Resorts

A group of private equity firms led by Kohlberg Kravis Roberts (KKR) is in the final stages of investing around Rs 1,000 crore (over $200 million) in Coffee Day Resorts — a company owned by VG Siddhartha, a serial entrepreneur and son-in-law of foreign minister SM Krishna — the largest investments by private equity in an unlisted firm in recent times reported the Economic Times.

The PE firms KKR, New Silk Route and Standard Chartered Private Equity are likely to end with an ownership of more than 20% in Coffee Day Resorts, which performs the role of a holding company besides running a host of businesses like resorts and IT parks apart from Café Coffee Day, the coffee chain, confirmed two people close to the transaction.

This fund-raising exercise — once concluded — will value the company between $800 million and $1 billion. KKR is likely to own over 10% of the unlisted company and invest between $75 million and $100 million, NSR is likely to invest between $50 million and $75 million, while StanChart will invest around $50 million.  Cafe Coffee Day, a subsidiary of Coffee Day Resorts, plans to use some of this cash to increase the number of retail outlets and also speedily add international locations to its small portfolio in Austria, Pakistan and Dubai.     Read More »

CIC sees opportunity for private equity investment

China Investment Corp., China’s $300 billion sovereign wealth fund, sees a “good opportunity” to boost private-equity investments this year, as companies are undervalued after losses from the global financial crisis reported Bloomberg.  “A lot of companies’ valuations are relatively low currently, and investors of many private-equity funds don’t have money to invest,” China Investment Corp. Executive Vice President Jesse Wang said in an interview with the official Xinhua News Agency today that was broadcast online.

CIC had “double-digit” returns from its overseas portfolio last year, Wang said, without being specific. The company increased spending on energy and minerals assets in 2009 to profit from the global economic recovery, announcing almost $10 billion of investments in commodity-related companies.

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JPMorgan and Hopu hired on $3.1 billion CNOOC-Bridas joint venture

Wall Street bank JPMorgan and Beijing-based Hopu Investments, run by influential China dealmaker Fang Fenglei, are advisers for a $3.1 billion energy joint venture between CNOOC and Argentina’s Bridas Energy Holdings, banking sources said as reported by Reuters.  CNOOC said it would pay $3.1 billion to take a 50 percent stake Bridas Energy subsidiary Bridas Corp. Bridas Corp, wholly-owned by Bridas Energy, would become equally owned by the partners, CNOOC said in a statement to the Hong Kong stock exchange.

JPMorgan has long-time business ties with China National Offshore Oil Corp, China’s biggest offshore oil explorer, while the deal marks the first advisory role for Hopu, which usually invests on its own.  CNOOC hired JPMorgan as sole adviser on the buy side, while Beijing-based Hopu was hired by Bridas as adviser for the sell side, sources with knowledge of the matter said recently.

The deal also reveals Hopu’s ambition to expand into the already competitive merger and acquisition advisory business in China, as well as to continue to invest on its own.  “Apparently, Hopu wants to become something like Blackstone in China. I am sure you will see Hopu take on more advisory roles in major deals in the future,” said a banker familiar with the matter.

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THL Partners’ co-president, Scott Sperling, discusses the state of private equity

Scott Sperling, THL Partners co-president, discusses the state of private equity on CNBC.  The length of the video is 5:46 and aired on April 1, 2010.

Dalip Pathak to manage Warburg Pincus’ India operations

Dalip Pathak, who started Warburg Pincus’ private equity business in India in 1994, will again run the firm’s operations in the country, Warburg Pincus said in a statement as reported by Bloomberg. Pathak currently runs the firm’s European business. Warburg’s India Managing Director Rajesh Khanna is leaving to start an India investment business.

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HarbourVest Partners looks to increase Australia private equity investments

Private equity firm HarbourVest Partners is looking to add exposure in Australia this year as the environment has improved, and does not plan to sell any of its direct investments in the country, a senior executive said as reported by Reuters.  HarbourVest Partners Asia Managing Director Philip Bilden said his fund of funds, one of the world’s largest private equity firms, was encouraged by a modest pick-up in bank financing and a stabilisation in asset values in Australia.  Australia accounts for about one-third of HarbourVests’s $2 billion in Asian investments.

“We recently recommitted with one of our managers. Our (private equity firms) would expect us to remain supportive,” Bilden said in an interview on the sidelines of an industry conference.

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Hong Kong-based Olympus Capital names David Shen as Head of Asia

Private equity firm Olympus Capital Holdings Asia recently said it has named David Shen, now in charge of its Japan business, to a newly created position as head of its Asian operations reported Reuters.  Shen, who will move to Hong Kong around July, will continue to lead the firm’s business in Japan, where it is planning to expand.  “This decision is designed to allow us to take a more focused approach to leverage our regional platform,” Shen said.

Hong Kong-based Olympus Capital will focus on the environment, food, agriculture and natural resource sectors in greater Asia, while the firm has country-specific strategies that fit each market, he said.  In Japan, Olympus is pursuing transactions involving medium-sized companies looking to expand abroad as well as business owners having trouble finding successors once they retire, he said.  Since 1997, Olympus Capital has invested about $1.3 billion in about 30 portfolio companies across Asia, with a focus on China, India, Japan and South Korea.

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StepStone Group’s Monte Brem discusses opportunities with China’s consumer market for private equity

Monte Brem, CEO of StepStone Group, sees big opportunity in China’s consumer market. He sheds light on how his private equity firm plans to bank on China’s consumer growth story with CNBC.  The length of the video is 3:10 and was aired on March 11, 2010.

Conversus Capital’s Bob Long discusses his outlook for private equity

Bob Long, CEO of Conversus, discusses his views and outlook for private equity with CNBC. The length of the video is 2:49 and it aired on March 2, 2010.

About Conversus Capital

Conversus Capital, L.P. (Euronext Amsterdam: CCAP) (“Conversus”) is a permanent capital vehicle and the largest publicly traded portfolio of third party private equity funds. Conversus’ objective is to provide unit holders with immediate exposure to a diversified portfolio of private equity assets, access to best-in-class general partners and consistent NAV returns that outperform the public markets. Conversus Asset Management, LLC (“CAM”), an independent asset manager, implements Conversus’ investment policies and carries out the day to day operations of Conversus pursuant to a services agreement. CAM leverages the platforms of Bank of America and Oak Hill, its primary owners.

Why MBAs are going East: BusinessWeek

At premiere institutions such as the University of Chicago’s Booth School, the University of Pennsylvania’s Wharton School, and Northwestern’s Kellogg, the percentage of MBAs taking jobs in Asia—including U.S. students like Tsai as well as international students—has more than doubled in the past five years, from roughly 5% of the graduating class to more than 10% reports BusinessWeek. “There is a sense that the center of gravity is shifting,” says Julie Morton, Booth’s associate dean for career services.  Adds Richard Florida, professor at the University of Toronto’s Rotman School of Management: “I don’t think many of us thought Asia would become the destination for top Western talent—but it is.”

So do many Chinese who emigrated to the U.S. when they were young. They find themselves breaking the news to their families that they’re chasing the same dream that lured their parents to the U.S., only in reverse. (What better time to leverage the family capital back in the old country?) The Chinese call these returnees hai gui, or sea turtles, referring to how these animals always return to their birthplace to lay their own eggs. Then there are the international students, who until recently would likely have stayed in the U.S. to learn the soft skills of Western management, and now are heading straight back home. Piyush Singhvi, 27, was born in India, grew up in the Middle East, and, before Wharton, worked at the Dubai-based private equity firm Abraaj Capital, the largest non-state-owned firm in the region. When Singhvi enrolled in Wharton in 2008 he was certain, he says, that he would stay in the U.S. after graduation like most of his peers. But then came the financial crisis. “It was amazing to see how many people came in with the idea that they would stay in the West, and how that’s drastically changed to just the opposite,” he says. “There are a lot more opportunities in the East.”

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Sino Latin Capital approved to raise and manage RMB-denominated private equity funds

Shanghai-Pudong Government announced that they had granted SinoLatin Capital the approval to raise and to manage RMB-denominated private equity funds.  “We are deeply appreciative and proud to have been granted this license, which signals the Chinese government’s support for our efforts to promote and expand the country’s investment relationship with Latin America,” said Luis Gomez Cobo, Founding Partner and Chairman of SinoLatin Capital.

As of March 2010, SinoLatin Capital’s subsidiary in China will be a “Private Equity Investment Management Company”. SinoLatin Capital becomes one of the first foreign financial institutions to be granted the license in China and now joins a very small group of foreign private equity firms with this distinction, including the Carlyle Group, the Blackstone Group and Apax Partners. To date, SinoLatin Capital is the only Latin America-focused firm to have been approved to manage RMB-denominated private equity funds in China.

Located in Shanghai’s financial district, SinoLatin Capital is the first financial advisory and principal investment firm focused exclusively on cross border transactions between China and Latin America. SinoLatin Capital’s industry focus is natural resources.

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Lone Star to resume $3.9 billion Korean Exchange Bank stake sale

Previous attempts by Lone Star to sell its 51 percent holding in the country’s 6th-ranked lender — to Kookmin Bank for $7.3 billion in 2006 and to HSBC for $6.3 billion in 2008 — failed due to pricing and legal disputes over the private equity firm’s South Korean activities reported Reuters.  Lone Star has sought to exit the bank to return profits to its stakeholders. KEB shares have more than doubled since late 2008 when HSBC walked away, and the value of Lone Star’s holding has more than trebled since it bought it for $1.2 billion in 2003.  Managing partner John Grayken said last month the fund expected to sell the stake in the next six months.

($1=1,131 won)

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