Carlyle moves on Indonesia

Carlyle has confirmed it has hired Rajiv Louis to head Indonesia investments, signaling a stronger focus on a market that some believe is overhyped.

The Carlyle Group has revealed it hired former investment banker Rajiv Louis as a managing director to lead the firm’s deal activity in Indonesia, according to a statement from Carlyle.
Louis formerly worked at UBS where he held several positions including, most recently, managing director and country head in Indonesia and head of investment banking in Indonesia. 

In Indonesia, he was involved in BHP Billiton's sale of a minority stake in the Kalimantan Coal Project to Adaro Energy and British American Tobacco's 2005 acquisition of Bentoel Cigarettes. 

“Rajiv is one of the most experienced and successful leaders in the investment banking industry in Indonesia,” said Greg Zeluck, managing director and co-head of the Asia buyout team, in the statement. “His strong networks and deep knowledge of Indonesia industries will greatly benefit Carlyle’s efforts in Indonesia as we continue to expand our business in the local market.

Indonesia is experiencing rapid growth led in part by a large, expanding group of middle-class consumers

Rajiv Louis, new head of Indonesia for Carlyle Asia

Louis added: “Indonesia is experiencing rapid growth led in part by a large, expanding group of middle-class consumers. We seek to bring Carlyle’s global platform and industry resources to local companies to help [them] grow.”

Louis, currently based in the Hong Kong office, will eventually be based in Jakarta. His hire adds a sixth professional to Carlyle’s Southeast Asia team, according to a source close to the matter. 

Last October, Carlyle completed its first ever Southeast Asian deal when it acquired a 25 percent stake in Indonesia’s Solusi Tunas Pratama, a publicly-traded telecommunications tower operator, reportedly for $100 million. 

Prior to that deal, the firm was unable to make an investment in Southeast Asia for ten years, PEI reported earlier. The firm’s previous managing director for Southeast Asia, Anand Balasubrahmanyan, left in early 2012 after four years without an investment. 

Indonesia’s growing middle class and large population, combined with the ASEAN free trade agreement in 2015, has made it attractive for growth-oriented private equity deals, but investments require local connections and rapport with the wealthy families who dominate the economy.

Rajiv Louis

Firms targeting Indonesia include TPG Capital, which will likely invest a portion of the $4 billion pan-Asian fund it is raising in Indonesia through its partnership with local firm Northstar Pacific Capital. CVC Asia Pacific, which is raising a $3 billion Asia fund, has done a string of deals in Southeast Asia and recently sold a 40 percent holding in Indonesia’s Matahari department store chain for $1.3 billion, bringing an estimated 3x multiple, PEI reported earlier.

Large global firms bidding on assets will drive up valuations in Indonesia, which by some estimates are already 30 percent above historical averages and over two times that of China. 

Nicolas Bloy, co-founder of Navis Capital Partners, which intends to open a Jakarta office this year, told PEI in a previous interview that Indonesia’s high valuations stem from “relatively easy credit and liquid public markets setting expectations. Private equity has to fight to get in”.