They know a thing or two about private equity in up and coming economies. Ernest Lambers, Nicholas Morriss, John Stephens and Christopher Wright have all spent their fair share of time pursuing emerging markets-related investment opportunities. Now the four men have teamed up to create EMAlternatives, a private equity investment consultant specialising in markets outside Europe and North America.
The quartet's most widely known member might be Lambers, who in his previous role made primary fund investments in emerging markets on behalf of European private equity heavyweight AlpInvest Partners. Since its creation in 2000, AlpInvest has invested more than €1.6 billion in Asian funds alone, which suggests Lambers is well connected in the region. Working from a base in Amsterdam, Lambers will serve as EMA's chief investment officer.
Morriss and Stephens, both managing directors, will be based in Washington, where prior to EMA they founded Cape Point Capital, an advisory business involved in private equity fund investments and direct deals in emerging markets around the world. Between them, they cite investment experience in Central and Eastern Europe, India, Asia, Latin America, Russia and Southern Africa.
Wright, who will chair the investment committee, is a former head of private equity at Dresdner Kleinwort Benson, a €4 billion platform with significant operations in many regions including Central Europe and Latin America.
Drawing on the combined experience of its founders, EMA aims to build customised investment portfolios for large institutional investors seeking exposure to private equity opportunities outside Europe and North America.
According to Morriss, the firm's focus is expressly global and will reach well beyond India and China, currently the two most popular destinations for emerging market private equity newcomers.
In an interview, Morriss said EMA wants to work with large institutions that do not have the resources to operate in some or all the emerging markets to which they seek exposure: “We will be offering a genuinely tailored service: if a client has Asia and Eastern Europe covered but needs help with Latin America, then that's what we will be working on.”
A first client is about to retain EMA, Morriss said. The firm will not be raising a fund, but hopes to manage up to 12 separate accounts in four to five years' time. Morriss said he would not be surprised if by then assets under management were in the region of $1 billion.
AUREOS LAUNCHES LATIN AMERICAN FUND
Emerging markets private equity firm Aureos Capital has launched a $300 million (€220 million) fund for investments in central and south America. The fund is expected to soon reach a first close on $150 million. Erik Peterson, who also manages Aureos' $36 million Central America Fund, will manage the Latin America fund. The Central America Fund is 80 percent invested and has delivered a 40 percent return on its one exit to date, the Difoto Group, a regional consolidation of Xerox's central America operations. Aureos has offices in Costa Rica and El Salvador, and plans to open offices in Mexico, Colombia and Peru. Founded in 2001, Aureos has about $600 million under management.
CDC BACKS SOUTH AFRICAN MEZZANINE FUND….
CDC, a UK government-backed fund-of-funds, has committed R100 million (€10 million, $14 million) to Vantage Risk Capital's South African mezzanine fund. The fund is the first independent mezzanine fund to be raised in South Africa. It held a first close of R310 million in August 2006, and has so far attracted commitments of nearly R500 million. It has a final target of R550 million to R600 million. Investors include the FMO, the Netherlands Development Bank, the Public Investment Corporation, the Eskom Pension and Provident Fund, Transnet Pension Fund and Metropolitan Asset Managers. The fund will be managed by Luc Albinski, previously head of mezzanine finance at Standard Bank South Africa, and Colin Rezek, who cofounded Vantage Capital Group in 2001. Since this date, the Johannesburg-based firm has invested R130 million in 10 companies in the region. CDC has invested more than R1.8 billion in South African private equity funds since 2003. R2.55 billion of private equity was invested in South Africa in 2005, 62 percent of which came from Europe, according to the African Venture Capital Association.
…. AND MEXICAN FUND
Nexxus Capital Private Equity Fund III has won a $20 million (€15 million) commitment from CDC. The fund is managed by Mexico-based Nexxus Capital, and has a $250 million target. The fund will not be sector-specific and will invest at least 80 percent in Mexican-based companies and the other 20 percent in companies in neighbouring countries with links to Mexico. It will typically invest between $50 million and $400 million in each deal, concentrating on both growth capital and buyout opportunities. Nexxus Capital was founded in 1998 by Luis Harvey and Arturo Saval. The firm has managed two previous funds in partnership with US-based emerging markets firm Zephyr. The first fund, Zephyr Nexxus Mexico Trust I, achieved an overall return of 3.2 times.
VINTAGE CLOSES THIRD FUND ON $125M
Vintage Venture Partners has closed Israel's only local secondary fund on $125 million (€93 million). The fund, Vintage Ventures III, will invest in Israel-related venture capital funds and private equity funds, and portfolios of Israel-related technology investments. The firm started fundraising in January with a target of $100 million. Investors include several Canadian, US and Israeli pension funds, international funds-of-funds, family offices and insurance companies. The fund will be managed by Alan Feld, formerly a general partner at Israel Seed Partners and Vertex Management, Abe Finkelstein, previously Israeli technology analyst for Goldman Sachs, and Amit Frenkel, formerly a general partner at Carmel and Infinity Ventures. Vintage was founded in 2003 by Alan Feld, Aharon Dovrat and Shlomo Dovrat. Its debut fund was a $64 million secondary fund and its second fund was a $75 million fund-of-funds.