Aureos invests $830,000 in Tonga

Aureos Capital has made its first investment in Tonga, an archipelago in the South Pacific Ocean. Tonga offers investment opportunities that are driven by increasing tourist arrivals in the Kingdom and the resulting need for infrastructure development.

Aureos Capital, a London-based emerging markets specialist, has invested 1.6 million Tongan Pa’anga ($830,000; €575,000) to acquire a 30 percent stake in Pacific Retail, a Tongan retailing company that focuses on office equipment, duty free shops, hardware and construction projects.

Pacific Retail recently participated in the first privatisation in Tonga when it acquired the government’s interests in duty free retailing.

All three of the company’s businesses stand to benefit from the growth in Tonga’s economy, Andrew Crompton, a managing partner of Kula Fund, said in a statement. The investment, which was made out of Kula Fund II, will be used to help the company expand its business and “to take advantage of the growth opportunities which are expected to emerge”, he said.

Tonga’s economic growth will be driven by increasing tourism and the initiation of infrastructure projects in the country, he added.

Kula II is a $16 million fund that was set up in 2006. It invests between $100,000 and $3 million per transaction in Pacific countries such as the Cook Islands, Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu.

Thus far, the firm has made five investments from the fund and deployed $6.67 million. It has made two investments in Papua New Guinea, and one each in Fiji, Tonga and Vanuatu.

Kula Fund I, the firm’s first fund focused on this region, closed on $16.7 million and is fully invested in eight deals – five of them in Papua New Guinea and three in Fiji. The firm has exited from six of the eight investments, Parameswaran Anantharaman, an investment partner of Kula Fund, told PEO.

Aureos currently manages assets of more than $710 million across 14 private equity funds. It is also raising a $100 million fund for Central Asia, $300 million for Latin America and $400 million for a pan-African fund.

Last month, Aureos acquired a 25 percent stake in Sri Lankan conglomerate Sunshine Group for $4.75 million from its $122 million South Asia Fund. It also bought a 5 percent stake in one of the group’s unit businesses, Watawala Plantations, for $900,000.