Private Equity News & Analysis

Billionaire raising second Caribbean fund

Michael Lee-Chin has raised $225 million for a Caribbean-focussed private equity fund targeting $400 million.

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Jamaican-Canadian billionaire Michael Lee-Chin is continuing his push to raise money for Caribbean private equity as the AIC Caribbean Fund II pursues a target of $350 million (€222 million) to $400 million two years into fundraising.

ACF II was seeded with $25 million from Canadian fund manager AIC and currently has $225 million in commitments from investors including development finance institution the European Investment Bank and telecom company Verizon.

Michael Lee-Chin

The fund has made one investment to date in telecom company Columbus Telecommunications, of which Lee-Chin owns 50 percent.

ACF II targets companies located in the 20-nation Caribbean regional economic bloc and the Dominican Republic. It plans to make six to eight investments in the Caribbean region with 80 percent invested in Jamaica, Trinidad and Tobago and the Dominican Republic.

“You get the best deals where nobody else is looking,” said AIC senior vice president Robert Almeida in an interview with PEO. Almeida said he believes that highly attractive valuations can be found in the region.

“The macro opportunity in the region is best indicated by the baby boom demographic in North America,” Almeida added. “You have the migration of baby boomers towards sun, sand and sea.”

AIC seeks to capitalise on the “services demanded by the macro”. As more hotels and residences are built, there will be rising demand for services in a wide variety of sectors.

Baby boomer-fueled target sectors include financial services, communications and entertainment. There will also be an opportunity in healthcare that AIC is “trying to figure out” how to capitalize on, according to Almeida who referenced medical and nursing schools as well as plastic surgery clinics as areas which have been profitable.

Logistics is another attractive area in the Caribbean. “The Port of Kingston [Jamaica] is well-endowed as a logistical hub,” says Almeida. There is also an opportunity in natural resources such as natural gas.

AIC’s first Caribbean fund was funded entirely by AIC. That fund closed on $260 million in 2002 and is currently fully invested.

Michael Lee-Chin is chairman of AIC, a company which he purchased in 1987. Over the last two decades the company’s assets have grown from approximately C$1 million ($986,000; €630,000) to C$10 billion.