Malaysia’s CMS Opus Private Equity is raising MYR 300 million ($72 million; €76 million) for its fourth fund, managing director Azam Azman told Private Equity International.
The firm plans to close COPE Opportunities IV by the end of the year. Its investor base is predominately Malaysian institutional investors.
The shariah-compliant fund, which invests along Islamic principles, will focus on Malaysian-based companies with international exposure or export-based activities.
There are plans to launch a fifth fund in the next couple of years and this will focus on the ASEAN region, Azman said.
“The first and second funds have been fully deployed and the aim is to deploy most of our fund three by 2016,” said Azman.
The firm aims to increase its assets under management to MYR 500 million from the current MYR 300 million through investments in 16 more companies this year, according to reports.
CMS Opus continues to be on the lookout for good acquisitions and “with COPE IV coming up we will raise enough to invest in more companies,” according to Azman.
And even though many companies in Malaysia are affected by the weak currency and commodity prices, Azman said the situation provides an opportunity for private equity firms like themselves.
In March CMS Opus acquired a 30 percent stake in Malaysian utility and water company Damini Corporation through its COPE Opportunities Fund II, reports said.
The firm specialises in unlisted emerging growth companies primarily in Malaysia, but with a secondary focus on other ASEAN and Australasian markets, Azman said.
It targets a 20 percent IRR keeping its “sights on reasonable, good returns while maintaining the risk-reward balance,” he explained.
CMS Opus is exiting its investments in oil and gas. In January the firm sold its 20 percent stake in TriSystems Engineering, a Malaysian oil and gas services company.
“We invested a lot in oil and gas companies in the previous funds and exited them within our investment holding period and based on our exit strategy,” Azman said.
The firm’s funds have a 10 year duration and the investment period is five years.
“For the oil and gas sector, we had a firm house view that the oil industry will experience some volatility and this translated to our exit strategy and execution of it.”
Azman added that being shariah-compliant was advantageous. “Malaysia is moving forward to become the international centre for Islamic finance and “we see an opportunity here where there will be a great demand in the future for Shariah-compliant products and services.”
CMS Opus is one of the oldest local players in private equity in Malaysia. It is the investment arm of CMS Capital and was founded in 2006. Opus Asset Management is a sister company and was founded in the same year.