Hong Chen is an ambitious individual. The founder of Hina Group, a Chinese investment bank established in April 2003, has launched a “dual” fundraising for Hina Capital Partners, a fledgling private equity business that will target investment opportunities in state-owned enterprises and mature private companies in the communications and IT sectors.
Two funds are being marketed. One will seek to take advantage of the restructuring and privatisation of government-owned businesses. The second will focus specifically on acquiring divisions of US telecom equipment and software companies with depressed valuations that have potential to exploit opportunities in China.
Chen certainly has the credentials to succeed. He was the first mainland Chinese national to lead a company – internet roaming firm GRIC Communications – to a flotation on Nasdaq. GRIC was backed by several major Singapore-based organisations such as Vertex, SingTel and Temasek – obvious candidates to pitch for his new private equity project.
But at the time of this issue going to press, Chen was in London talking to potential European investors. “The feedback to our initial meetings and inquiries is quite positive because of the approach we are taking and the team we have,” he said.
Hina is emphasising its familiarity with the market. It says all five of the buyout fund's general partners are Chinese and four of the five have buyout, venture and M&A experience in China.
Hina has not announced its target fund size, but a report in the Singapore Business Times quoted Chen as saying it would not shy away from doing big deals and would bring in co-investors if necessary. If the fundraising is successful, Hina will be competing against large global investment groups such as Carlyle Group, Warburg Pincus and Hambrecht & Quist.
STARFISH TESTS NEW AUSTRALIAN PARTNERSHIP STRUCTURE
The Australian technology investor set up in 2001 has announced a A$62.5 million (€38.9 million; $49.4 million) first closing of its Starfish Technology Fund I. The fund is the first in Australia to be established under a new Venture Capital Limited Partnership (VCLP) structure designed to attract international investors. The “flow through” vehicle, which aligns Australian venture capital structures with international LP structures, means that investors from eligible countries (including the US, Canada, UK, France, Germany and Japan) are no longer liable to pay 30 percent capital gains tax – a major obstacle to foreign investment previously. At the first close, Starfish had succeeded in attracting international investor Mitsui & Co to the fund and expects to announce more international backers “shortly”. The fund's final target is A$100 million.
SOUTH KOREAN INVESTMENT TRUSTS LURE VCS
US private equity funds Newbridge Capital and Lone Star are among a number of bidders for two South Korean investment trust companies, according to reports. Korea Investment & Securities (KIS) and Daehan Investment & Securities (DIS), the second and third largest investment trusts in the country respectively, have a combined $30 billion (€24 billion) under management. The state-owned assets are being sold as part of the Government's restructuring of the asset management sector, which has struggled to recover from the country's financial crisis in the late 1990s.
Newbridge holds existing stakes in Korea First Bank and Hanaro Telecom, the country's second largest broadband operator. The two private equity firms are expected to face competition from a number of trade bidders including US insurer AIG and South Korea's Mirae Asset Group.
MALAYSIA'S NAVIS LEADS COFFEE BUYOUT
Navis Capital Partners, the Malaysian private equity fund manager, has backed the $15 million (€12 million) buyout of Dome, an Australian and Asian speciality coffee and restaurant chain. Dome, which is the fourth acquisition made by Navis in the last six months, has more than 60 outlets in Australia, Brunei, Indonesia, Malaysia, Philippines, Singapore and UAE. Styled on a Continental European bistro theme, Dome outlets offer its own speciality coffee blends and a full food menu. Navis will aim to at least double the number of outlets within the next three years. Navis was founded in 1998 by former employees at Boston Consulting Group and last year raised a Shari'ah-compliant private equity fund.
CVC TO REFILL ASIAN FUND COFFERS
CVC Asia Pacific, the Asian private equity business of CVC Capital Partners, has announced plans to launch a $1 billion (€800 million) buyout fund. It will be the successor to the firm's debut Asia fund, which closed on $750 million in 2000. CVC has made a total of thirteen investments across the region since 1999, when the firm backed a $210 million buyout of WiniaMando Inc, a manufacturer of climate control systems for commercial vehicles based in Korea. Last year CVC joined forces with JP Morgan Partners Asia to acquire Singapore Telecommunications Yellow Pages directories business for $127 million in cash. In December 2003, the firm acquired Pacific Brands, a distributor of clothing, sporting goods and household products in Australia and New Zealand, for $403 million. This business is currently being prepared for an IPO later this year.
AMP CAPITAL LAUNCHES SECOND INDIA FUND
Singapore-based AMP Capital Investors, the fund management arm of Australian financial services company AMP, has launched its second infrastructure fund targeting the Indian market. The $100 million (€80 million) Infrastructure Fund of India (TIFOI) will make investments across all sectors with the aim of achieving investment returns of at least 20 percent per annum.
AMP Life has committed up to $30 million while the Asian Development Bank (ADB) has agreed to invest $15 million. The fund recently completed its first partial exit through the float of Indraprastha Gas. Other investments include Tata Teleservices, Bharti Televentures and Gujarat Pipavav Port.
PATNI IPO OVERSUBSCRIBED
Patni Computer Systems, the Indian software company in which global venture capitalist General Atlantic has a minority stake, looks set for a successful initial public offering after the issue was 22 times oversubscribed. The listing, which aims to raise $95 million, was set at the top end of estimations, and will value the business at over $600 million (€478 million). Patni is selling 13.4 million shares, while 5.32 million more are being sold from founders and other shareholders including investment units of General Electric. General Atlantic invested $100 million in Patni in late 2002.