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Tue, 2-Mar-2010 Carlyle Group, one of the world’s largest private equity firms, will set up a yuan-denominated fund with Fosun Group, a Chinese privately owned company whose businesses span steel, mining and property reported Bloomberg. Washington-based Carlyle and Fosun have invested $100 million in the fund, which will focus on investments in “high-growth companies,” and will seek more capital from local Chinese investors.
Blackstone Group LP was the first global private-equity firm to set up a 5 billion yuan ($731 million) fund with the Shanghai government in August to target investments in the eastern coastal city and neighboring areas. Carlyle is also planning a domestic Chinese private-equity fund with the Beijing government.
Carlyle will operate two yuan-denominated funds as it expects to finish raising capital this year, co-founder David Rubenstein said in a telephone interview with Bloomberg.
“We haven’t set a target for it yet,” he said. “I expect it could be done by the end of the year, could be done sooner.”
The company may seek about 5 billion yuan for the fund set up with the Beijing government, a person with knowledge of the matter said.
The fund to be set up with Fosun will seek investments from pension funds and wealthy individual Chinese to money managers, primarily in Shanghai, Rubenstein said. Read More »
Fri, 26-Feb-2010 Indian financial services group Religare Enterprises Ltd agreed to take a controlling stake in private equity firm Northgate Capital, as part of a $1 billion plan to build a global asset management business reported Reuters. Religare will take more than 60 percent in the company, while the management will retain the rest. The terms of the deal were not disclosed, but based on similar transactions, the deal could value Northgate at as much as about $200 million. Northgate, with $3 billion under management, is Religare’s first U.S. deal and the Indian company is hoping to end the year with at least $60 billion to $65 billion of assets under management through further acquisitions, Religare Enterprises Chief Operating Officer Shachindra Nath told Reuters.
“If we happen to get a fixed income shop, we might cross 100 (billion),” said Nath, who was speaking on the telephone after an off-site meeting in the Indian city of Udaipur. Read More »
Mon, 22-Feb-2010 An investment arm of Bank of Communications, China’s No.5 lender, said recently that it aims to raise $250 million to $500 million for a private equity fund focused investing in China reported Reuters. The offshore fund, the first private equity fund for BOCOM International, would focus on China’s consumer industries, high-speed rail systems, healthcare, clean energy and infrastructure companies, said Simon Hua, head of private equity.
Shanghai-based BoCom is 20% owned by HSBC Holdings Plc. The dollar fund would invest in companies with IPO potential and would be listed in Hong Kong in 12 to 24 months, Hua said. He added: “We see a lot of state-owned entities restructuring; there are opportunities there. As a central government-owned bank in China, we are actually well positioned for that kind of restructuring.” Read More »
Tue, 16-Feb-2010 Affinity Equity Partners, an Asia-focused private equity firm founded by former top UBS bankers, plans to raise a new multi-billion-dollar buyout fund reported Reuters. The firm, founded in 2002 by K.Y. Tang, former chairman of UBS Capital, Asia Pacific, aimed to exceed the size of its most recent fund — Affinity Asia Pacific Fund III LP at $2.8 billion — for the new fund.
Affinity’s LPs include many U.S. and European pension funds, including California Public Employees’ Retirement System, also known as CalPERS, the biggest U.S. pension fund. Affinity closed its third buyout fund, the $2.8 billion Affinity Asia Pacific Fund III LP, in 2007 and more than half of the capital had been invested, one of the sources said.
Besides Jakarta, Affinity also operates offices in Hong Kong, which is its headoffice, Seoul, Tokyo, Singapore and Sydney. In Australia, the fund aims to sell its portfolio company, Loscam, a pallet maker, for more than $433 million.
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Mon, 15-Feb-2010 Citic Capital Holdings Ltd., 40% owned by China’s sovereign wealth fund, raised $925 million in its second China buyout fund to focus on the consumer and manufacturing industries reported Bloomberg. The fund exceeded the original target of $750 million, the company said in a statement. Citic Capital raised $425 million in its first China buyout fund in April 2007, 70% more than planned, said Cindy Tam, a spokeswoman for the Hong Kong- based company.
“Investors are still very confident about China’s private- equity market despite the recent economic tightening in China,” said Hubert Tse, head of the international business group at Yuan Tai PRC Attorneys in Shanghai. “It reflects the increasing financial strength of some Chinese funds which are becoming major players in the Asia private-equity market, not just in China.”
Citic Capital’s first buyout fund bought stakes in Harbin Pharmaceutical Group Co. with Warburg Pincus LLC and Fushun Excavator Co., China’s biggest maker of hydraulic crawler cranes, Tam said. The fund invested in Guan Sheng Yuan (Group), one of China’s biggest confectionery companies, which sells White Rabbit candies.
Citic Capital, founded in 2002, manages more than $3 billion raised from international and Chinese investors, and its businesses include private equity, real estate and asset management, the statement said. Hong Kong-listed Citic Pacific Ltd. and CITIC International Financial Holdings Ltd. each own 27.5% of Citic Capital, while management of Citic Capital owns 5%, Tam said.
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Sun, 14-Feb-2010 China Investment Corp (CIC) has invested €685m (US$949m) into Apax Partners’ €11.2bn (US$15.5bn) fund and CIC also acquired a 2.3% stake in the management company of one of Europe’s biggest private equity funds reported the Financial Times.
Apax offered investors in its latest fund the option to transfer as much as €800m of their unfunded commitments – the part of their investments still to be called for future deals – to the Chinese fund.
Martin Halusa, chief executive of Apax, said: “We never had a single investor tell us they could not fund their commitments. Most investors who do want to take this up are not doing it for liquidity reasons, but for a variety of reasons, such as a strategic shift from investing in funds to investing directly in deals.” Read More »
Sat, 13-Feb-2010 Apollo Global Management LLC, the buyout firm run by Leon Black and Joshua Harris, has set up its first Asia real estate fund to be run by Grant Kelley, former chief executive officer of Colony Capital Asia reported Bloomberg.
The New York-based company said it has established Apollo Global Real Estate Management Asia Pacific Ltd., focusing on property investments in Australia, Japan and South Korea, Apollo said in a statement today. The fund will be run out of Hong Kong.
Kelley, who founded Holdfast Capital Ltd. after leaving real estate private-equity fund Colony Capital in late 2008, will bring his team of seven investment professionals to join Apollo Global Real Estate in Asia, the company said in the statement. The fund will seek opportunities to buy undervalued property assets, loans and trusts with values between $100 million and $500 million, it said. It also plans to invest in China and India over time, Apollo said.
Apollo manages more than $51 billion globally in private equity.
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Fri, 12-Feb-2010 Quadrangle Capital Partners, the private-equity firm co-founded by Steven Rattner, led a group of investors in buying stakes in Tower Vision India Pvt., the nation’s second-largest independent manager of wireless towers reported Bloomberg. The equity capital and some additional debt financing will provide Tower Vision with $300 million to add to its portfolio of transmission sites, the companies said in a joint press release. The New York-based private equity fund, which manages $3 billion in assets, will take a “significant minority” stake in Tower Vision, Jessie Hsieh, who handles media enquiries for the fund, said without giving more details.
This is the first transaction in Asia for Quadrangle Capital, which opened a Hong Kong office in 2008. The fund’s investments in the region will focus on telecommunications, media and technology in India, China and Australia, Hsieh said.
Tower Vision, based in Gurgaon, has more than 5,000 sites in India, the world’s second-largest wireless market by subscribers, where it competes with Indus Towers Ltd., a venture controlled by Bharti Airtel Ltd. and Vodafone Group Plc.
GTL Infrastructure Ltd., India’s largest independent operator of mobile-phone towers, agreed to buy transmission sites from Maxis Communications Bhd.’s Aircel Ltd. unit for 84 billion rupees ($1.8 billion) earlier this month to help it double its network in India.
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Thu, 11-Feb-2010 Thailand’s Government Pension Fund is reconsidering increasing its overseas investment, eying Asia for potential growth, newly appointed Secretary-General Sopawadee Lertmanaschai said recently as reported by Dow Jones. The country’s largest local institutional investor plans to invest in overseas real estate and infrastructure through foreign funds, while investment via private equity is also on the radar, she said in a briefing.
Almost 10% of its THB335.51 billion ($10.1 billion) total investment is in global equities, while global fixed income accounts for 4.2% of the total portfolio. The limit of investment abroad is capped at 25% of total investment according to the law.
Sopawadee said it’s unlikely the fund’s performance can match the 8.9% return last year, when markets climbed sharply after slumping in 2008. She didn’t provide a growth figure target but said the fund’s performance should beat the performance of Thailand’s benchmark SET Index.
To cope with accelerating inflation, the fund is seeking authorities’ approval to allow it to invest directly in commodities, said Nachcha Protpakorn, deputy secretary general, Investment Compliance and Operation Group. Currently, the fund can invest in commodities through funds of asset management firms.
Around 68.8% of total investment is in Thai fixed income, in which more than 90% is bonds issued by the government, Bank of Thailand and state enterprises. The average maturity of the bonds the fund holds is around two years, she said.
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Wed, 10-Feb-2010 Delta Partners, a Dubai-based private equity investor, has invested an undisclosed sum in Aricent Technologies, a communications software company based in California, USA as reported by Reuters. Aricent has strong presence in Asia Pacific in countries including India, China, Korea and Japan.
The investment came after Singapore-based electronics manufacturing services provider Flextronics International Ltd sold its minority stake to private equity majors like Kohlberg Kravis Roberts & Co. (KKR), Sequoia Capital, The Family Office and The Canadian Pension Plan (CPP) Investment Board for $255 million in September 2009. Read More »
Mon, 8-Feb-2010 Emerging markets are destined to make up a bigger share of private equity deals as buyout firms seek a larger slice of their growth, the chief executive of leading private equity investor Alpinvest said as reported by Reuters. Private equity dealmaking is starting to re-emerge after a torrid year in 2009, when falling sales and high debt burdens rocked the industry’s portfolio companies. But with new debt for deals now more expensive, buyout houses are likely to look to emerging markets as they seek out higher growth companies to meet their target returns.
“In 2009 almost 25 percent of the big buyouts were done in Asia,” said Volkert Doeksen, Chief Executive Officer of Alpinvest. “It won’t necessarily mean it will be 25 percent in the next couple of years, but it is a signal that, over time, non-traditional markets will become a bigger element in private equity,” he said. Read More »
Sat, 6-Feb-2010 Bain Capital said in a statement that it would buy Japanese firm Higa Industries Co from Duskin Co, Daiwa SMBC Capital and Ernest Higa, the founder of Higa reported Reuters. “In Japan pizza delivery is a niche business and home delivered pizza is treated as a specialty item so there is less price sensitivity,” said David Gross-Loh, a managing director at Bain Capital in Tokyo. He said delivered pizza is priced higher in Japan than in the U.S. and that this boosts opportunities for the development of new products and marketing.
Domino’s Pizza charges 3,900 yen, or $43, for a large pizza with roasted chicken topped with anchovy sauce, according to the company’s website. Even a medium pizza with just cheese and tomato sauce costs about $10. Domino’s Pizza currently only operates in Tokyo and Osaka, Japan’s two largest cities, so there is considerable scope for expansion, Gross-Loh continued.
Bain did not disclose the purchase price although Duskin, which owns 44% of Higa, said it was selling its stake for 2.64 billion yen ($29 million), making the entire company worth about 6 billion yen ($66 million). Read More »
Thu, 4-Feb-2010 New Horizon Capital, whose co-founders include the son of Chinese Premier Wen Jiabao, aims to raise a $1 billion private equity fund to invest in domestic industry leaders ready to make initial public share offerings reported Reuters. This would be the third and largest private equity fund for New Horizon, which had about $500 million under management since it was established in 2007, according to sources. New Horizon Capital recently completed raising $600-$700 million for its latest fund by a first closing date, with capital commitments from Japan’s Softbank Corp and Singapore state investor Temasek Holdings, sources said.
Softbank, run by influential Japanese tycoon Masayoshi Son, and Temasek were long-time investors since the firm launched its first fund in 2007, the source added.
Wen Yunsong, also known as Winston Wen, helped form New Horizon Capital in 2005, a few years after graduating with an MBA from Kellogg School of Management at Northwestern University in the United States, according to the sources close to Wen. Between graduation and the launch of New Horizon Capital, Wen started a telecoms equipment maker whose key clients included large banks and securities firms, according to Chinese and Hong Kong media reports. Wen later sold the company. Read More »
Tue, 2-Feb-2010 BTS Investment Advisors, a private equity fund based in Zurich and Mumbai, plans to start a $150 million fund to invest in Indian clean energy companies amid rising interest in green power to fuel Asia’s top economies reported Bloomberg. BTS expects to start the fund by April with an initial $60 million and increase that to $150 million over the next year, Managing Partner K. Srinivas said.
“There has been a perception that the clean energy industry is thriving on subsidies, but we have a different opinion,” Srinivas said recently. “The industry is maturing and it is now being commercially driven,” because of better government policy, including a more liberalized power trading market and clearer tax structures, “Like the technology sector in the 1990s, clean energy from 2010 onwards will be the main theme for private equity.”
BTS plans to initially invest in companies producing power from wind, biomass and water, as well as those manufacturing renewable energy equipment, he said. Read More »
Sun, 31-Jan-2010 Axiom Asia Private Capital Management Services, L.P. (“Axiom Asia”) announced recently the final closing on its second fund, Axiom Asia Private Capital Fund II, L.P. (the “Fund” or “Axiom II”). The Fund’s total investor commitments of US$950 million represent the maximum amount the Fund could raise under agreement with its investors and exceeded the initial target of US$750 million. The
Fund was oversubscribed, with firm indications of interest exceeding US$1.1 billion. San Francisco-based Probitas Partners acted as principal placement agent for the Fund.
Axiom II is the successor fund to Axiom Asia Private Capital Fund I, L.P., Axiom Asia’s first fund, which had US$440 million of investor commitments and commenced investing in 2006. The Fund will invest in a portfolio of management buyout, venture capital, growth capital and other private equity funds in Greater China, India, Japan, Southeast Asia, Korea and Australia. The Fund will typically target investments of up to US$100 million per invested fund and will also target select investments in secondary fund interests and portfolio companies alongside invested funds. Read More »
Fri, 29-Jan-2010 CVC Capital Partners has struck a Rp7,200bn ($770m) deal to acquire Indonesia’s leading department store chain reported the Financial Times. Pending regulatory approval, the buy-out group will gain control of Jakarta-listed Matahari Department Stores, in the country’s biggest private equity deal.
CVC’s Asia-Pacific unit is among the most prominent buy-out houses in the region, but the Matahari deal marks its first foray into Indonesia, a country often overlooked by global private equity groups. Foreign investor interest in Indonesia has risen after the recent re-election of President Susilo Bambang Yudhoyono, in the belief that added political stability will help fuel Indonesia’s strong economic growth.
Indonesia was given a vote of confidence on Monday by Fitch, which lifted its ratings to one notch below investment grade. Read More »
Wed, 27-Jan-2010 Hopu Investment Management Co., the $2.5 billion fund run by Goldman Sachs Group Inc.’s former Asia investment-banking chief, bought 4.9% of PT Lippo Karawaci, Indonesia’s largest property developer, said a person with knowledge of the matter as reported by Bloomberg.
Beijing-based Hopu purchased the stake from China Resources Holdings Co. for $45 million, the person said, asking not to be identified before an announcement in October. The purchase price was 508 rupiah per share, a 27% discount to the prior day’s closing price, the person said.
Indonesia, Asia’s fastest-growing major economy after China and India, has made more significant changes in easing business regulations than other economies in the Asia-Pacific region, according to a World Bank report published last month.
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Mon, 25-Jan-2010 Darby Overseas Investments, Ltd. (“Darby”), the private equity arm of Franklin Templeton Investments, announced that its Darby Asia Mezzanine Fund II (“DAMF II”) provided a US$33.5 million senior secured convertible loan to PECH Holdings LLC, the holding vehicle of Prestolite Electric Beijing Ltd. (“PEBL”), which is the China-based operating joint venture controlled by Prestolite Electric Incorporated (“Prestolite”). Proceeds from the transaction were used by Prestolite for corporate purposes. Further details on the transaction were not disclosed.
Founded in 2001 and based in the Tongzhou District, an eastern suburb of Beijing, PEBL is the leading full-line provider in China of medium- and heavy-duty alternators and starter motors to both original equipment manufacturers and the aftermarket. PEBL offers the broadest line of heavy-duty alternators in China, and is the largest supplier of alternators to both the Chinese bus and truck markets. In addition to starter motors and alternators, PEBL also supplies related component parts, including regulators, armatures, rotors, and shafts.
Prestolite, which is based in Plymouth, Michigan, is a major global manufacturer of alternators and starter motors sold in the medium- and heavy-duty vehicle, military, and industrial markets. With operations in North America, South America, Europe, and Asia, Prestolite provides value-added, highly engineered products under the Prestolite Electric, Leece-Neville, and Indiel brand names. Prestolite is primarily owned by a fund managed by First Atlantic Capital, Ltd. (“First Atlantic”), a New York based private equity firm.
David Hudson, Darby’s senior managing director for Asia and Global Infrastructure, commented: “PEBL is well positioned to take advantage of strong prospects in the China medium- and heavy-duty vehicle industry. We are attracted to PEBL because of its strong leadership, broad offering and innovative new products.” Read More »
Sat, 23-Jan-2010 Nature Elements Capital, a Chinese investment firm, aims to raise up to US$400 million for a private-equity fund focused on clean energy in China reported the Dow Jones Newswires. The fund will have both Chinese yuan and U.S. dollar components. The firm aims to raise about CNY1 billion (US$146 million) and about US$150 million to US$200 million. The U.S. dollar and yuan funds may invest in tandem or individually, depending on the investment opportunity, said KK Chan, the firm’s founder.
The firm is approaching a range of investors in China and around the region, as well as in the U.S. Nature Elements Capital signed a memorandum of understanding recently with the Hangzhou government, which will become a sponsor with CNY100 million.
The new fund will invest in companies involved in clean energy, energy efficiency and environmental protection. Although there have been some very expensive deals in the clean energy industry, “there are still lots of investment opportunities available for investors who know the market,” Chan said.
Chan was formerly managing director and head of investments for Greater China at Climate Change Capital Ltd. Prior to that, he was a managing director at CLP Renewables, where he ran the clean energy division for Asia Pacific.
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Thu, 21-Jan-2010 BC Partners Ltd., the private equity firm that has stakes in Office Depot Inc. and Foxtons Ltd., plans to start raising about 5.8 billion euros ($8.4 billion) for leveraged buyouts this year reported Bloomberg.
“We expect to be in a position to start raising the next fund in the latter part of this year,” managing partner Charlie Bott said in an interview. “Targeting the size of our current fund is consistent with our historical pace of investment.” “The mood of our investors was grim at the beginning of last year,” Bott, 50, said. “It is better now, but still cautious. They will be focusing on how successfully we have been able to invest the money.”
The firm valued assets in its current fund, which has more than 100 investors, at 1.2 times the acquisition cost at the end of September. This places BC Partners slightly below the 1.28 times multiple the top quartile buyout funds that were raised the same year posted at the end of June, according to data compiled by Preqin. The median return of funds bigger than $4.5 billion stood at a 0.93 multiple, Preqin said. Read More »
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