Cobalt Equity Partners, recently formed out of GE’s Asia Pacific private equity business, will begin fund raising later this year, Cobalt managing partner and former head of GE Equity Asia Pacific, Mark Chen, told Private Equity International.
The new mid-market Asia growth fund will target about $500 million and talk initially to investors in the region, where it has relationships, and then potentially market globally.
Chen ran the GE team for 10 years before he exited in May, and has 15 years private equity experience. Half of the GE team of 10 people are expected to move with him.
“Our friendly separation from GE has allowed us to retain our 15-year track record. Regarding the remaining assets, GE is exploring options,” said Chen, who is based in Hong Kong.
The legacy team has experience of investing in emerging markets in east Asia, including China, Korea and Taiwan, and in industrial sectors aligned with GE, such as infrastructure, oil and gas, energy, manufacturing and health care. “These are businesses you can touch and feel,” Chen said.
Whether to spin out or sell GE Capital’s Asia Pacific private equity business has been under discussion for some time as GE Capital comes under tighter US banking regulations and disposes of business units.
In March, a consortium including KKR agreed to buy the Australian and New Zealand division of GE Capital for about $6 billion, as previously reported by Private Equity International.
The Canada Pension Plan Investment Board is in talks to buy GE Capital’s buy-out lending business for $4 billion, according to reports. Apollo Global Management and Ares Management were among the bidders for the business focused on Chicago-based GE Antares Capital.