Kuwait-based investment bank Global Investment House is the latest organisation to test appetite for a listed private equity vehicle. The longstanding private equity investor is listing Global MENA Financial Assets, which will focus on financial sector assets in the MENA region, on the London Stock Exchange. It is expected that dealing in the shares will commence on or around 18 July, according to a statement.
The fund is aiming to raise up to $500 million (E323 million) through an offering to institutional and professional investors in certain jurisdictions including the Gulf Cooperation Council (GCC) states.
A notable feature of the fund is that at or shortly after admission, it will acquire eight investments in financial institutions from Global Investment House, which were valued at $272 million on 27 May 2008. It is expected that all the capital raised will be fully invested within 12 months from admission. Global Investment House will retain a 29.99 percent interest in the fund.
According to a statement accompanying the listing announcement, fund adviser Global Capital Management has, since 2003, invested $934 million and committed $1.1 billion to 46 private equity portfolio companies, realising a net internal rate of return of 55.82 percent. More than a quarter of these were in the financial services sector, which has claimed more of the firm's capital than any other sector.
Global Investment House itself listed on the London Stock Exchange through the issuance of global depositary receipts (GDR) in May this year, raising $1.15 billion and becoming the first Kuwaiti company to go public in London. The firm also listed GDRs in Kuwait, Bahrain and Dubai.
The firm said its listing “will contribute to improving the company's level of transparency and corporate governance to international standards, as well as allowing international investment companies and foreign investors to invest in the company”.
Just a couple of months later, the firm has provided further evidence of its enthusiasm for tapping the public markets.
AIF BACKS INDIAN HEALTHCARE FIRM
AIF Capital, an Asia-focused private equity firm, has invested $31 million (€20 million) in BioPlus Life Sciences, a manufacturer of healthcare supplements in India, for an undisclosed stake. BioPlus' primary businesses focus on the pharmaceutical, nutritional and cosmetics segments. It manufactures and supplies a wide array of healthcare supplement formulations and supplies them to pharmaceutical and retail companies in the European market. The company is looking to launch its own brand of healthcare supplements in markets such as Asia, Eastern Europe and the Middle East and is engaged in the research and development of new products. AIF Capital said BioPlus is well-positioned to benefit from opportunities arising from demographic changes occurring in the region. Peter Amour, chief executive of AIF Capital, said in a statement: “The investment reinforces our confidence in the growth prospects in the healthcare sector in Asia.” The BioPlus investment was made out of AIF Capital Asia III, a $435 million fund that invests in expansion, buyout and special situation opportunities in China, India and Southeast Asia.
EX HENDERSON MAN TO LEAD PAUL CAPITAL IN HONG KONG
US secondaries and fund of funds investor Paul Capital Partners has bolstered its Asian team with the appointment of Lucian Wu as managing director and head of its Hong Kong office. Wu is responsible for managing all the firm's secondary investment activities throughout Asia. The Hong Kong office was opened in August 2007 by Jason Sambanju, who joined the firm as a principal. Prior to joining Paul Capital, Wu was a partner in Asia at Henderson Private Capital, the private equity arm of investment firm Henderson Global Investors. He was also a founding member of private equity firm Electra Partners Asia. Paul Capital maintains offices in New York, San Francisco, London, Paris, Toronto, Hong Kong and Sao Paolo.
VIBURNUM SEEKS TO DOUBLE UP
Viburnum Funds, an Australian private equity fund manager, has launched Viburnum Private Equity Fund II, a A$100 million ($95 million; €61 million) fund targeting investments in Western Australia. The firm is looking to hold a first close for its fund soon, and expects a final close before the end of the year. Marshall Allen, managing director of Viburnum Funds, told sister website PrivateEquityOnline.com that the fund is targeting sector-agnostic investments in small and medium sized enterprises, typically in companies with an enterprise value of less than A$50 million. It will make growth and replacement capital investments in Western Australian businesses. The firm's Viburnum Private Equity Fund I closed on A$51 million and is fully committed in five deals, Allen said.
KKR IN SINGAPORE DISK DRIVE DEAL
Kohlberg Kravis Roberts is acquiring Unisteel Technology, a Singapore-listed manufacturer of computer disk drive parts, for S$785 million ($576 million; €365 million). The firm's bid proposal of S$1.95 per share was accepted by Unisteel and, under the agreement, KKR will acquire all the shares of the company using its $4 billion KKR Asian Fund. Established in 1988, Unisteel Technology has manufacturing units in China, Malaysia and Singapore. It provides precision engineering and serves customers in the hard disk drive, mobile telecommunications, consumer electronics, industrial and automotive sectors. The acquisition of the company will be completed once the necessary shareholder approvals have been obtained, the firms said in a statement.
REPORT: CHINA LINING UP TPG FUND COMMITMENT
TPG has reportedly become the latest US buyout firm to attract Chinese state investment, with the country's State Administration of Foreign Exchange agreeing to commit more than $2.5 billion (€1.6 billion) to its sixth buyout fund. The commitment was revealed in a Financial Times report that did not reference sources. A spokesman for TPG declined to comment. The sovereign fund's decision to make a traditional fund commitment rather than invest directly into TPG's management company, such as the China Investment Corporation's purchase of a 10 percent stake in The Blackstone Group, illustrates a desire to distance itself from political backlash associated with private equity, the Financial Times said. TPG's sixth global buyout fund is targeting approximately $20 billion, according to numerous market participants. Roughly two months ago, a limited partner source said that the fund had some $17.5 billion in commitments and was near closing. Should the fund close on an amount above $21.7 billion, it would surpass Blackstone's record for raising the largest-ever leveraged buyout fund. TPG Partners VI will make equity investments of between $200 million and $1 billion in companies with market valuations of $300 million or more, according to documents from the Pennsylvania State Employees' Retirement System, which agreed to commit up to $400 million to the fund.
LEVERAGED FINANCE VET JOINS BLACKSTONE CREDIT UNIT
GSO Capital Partners, The Blackstone Group-owned alternative assets manager focused on leveraged finance, has tapped Tim Donahue to start its credit investment business in Asia. He will join GSO later this year, a source familiar with the matter said. Blackstone declined to comment. Based in Hong Kong, Donahue resigned in May as head of JPMorgan's leveraged and acquisition finance group for the Asia Pacific region, a spokeswoman for the investment bank confirmed. At GSO, Donahue will report to firm founder Bennett Goodman. In Asia, the firm will seek investments in mezzanine, equity-linked debt, distressed and leveraged loans, Bloomberg reported sources as saying. Established in 2005, GSO Capital Partners was acquired by Blackstone for $930 million (€596 million) earlier this year. The firm manages about $4 billion in its credit hedge fund, $1 billion in mezzanine capital and approximately $5 billion in CLO vehicles. Its other offices are located in New York, London, Los Angeles and Houston.
$2BN GREEN FUND LAUNCHED IN CHINA
Berun Group, a Beijing-based financial services provider, and the Australian Private Capital Investment Group are raising a $2 billion (€1.3 billion) private equity fund to invest in China, according to a Reuters report. The GPE Fund, which stands for ‘Green Private Equity’, will invest in companies focused on environmental protection. “The fund has an ultimate investment goal of $2 billion, the highest amount ever for a Chinese green fund, ”Wang Xiaodong, Berun chief executive, said. He added that investors in the fund include high-net-worth individuals and institutions from Australia, Europe, the Middle East and Japan. The fund has been approved by the Chinese authorities, providing an example of the Government's increasing support of policies and initiatives that promote clean energy and environment sustainability.
CAMBODIA FUND POSTS FIRST CLOSE
Leopard Capital, a Hong Kong-based private equity firm is raising a $100 million (€64 million) private equity and real estate fund to invest in Cambodia. Thomas Hugger, managing partner of Leopard Capital, said the fund has had an initial close on $11 million, with a final close expected by March 2009 at the latest. Capital raised so far has been drawn from one institutional investor from Singapore and high-net-worth individuals from Europe, the US and, to a lesser extent, Asia. The fund is on the verge of closing its first deal. It is investing about $2.5 million for a 24 percent stake in a 250-unit condominium development project. The Leopard Cambodia Fund will invest in diverse sectors including manufacturing, telecom, transportation, agribusiness, real estate, hotels, energy and financial services. It will invest across all stages, with a focus on investments in startups and pre-IPO investments in existing companies, which it will aim to list on the stock exchange. Cambodia's first stock exchange opens in September 2009.
$1BN TARGET FOR DUBAI'S ITHMAR
Ithmar Capital, a Dubai-based private equity firm, has unveiled plans to raise its third and by far its largest fund in the second half of the year. The firm is looking to raise $1 billion (€645 million) for Ithmar Fund III, four times more than its previous fund which closed on $250 million. The fund will invest in companies based in the Gulf Cooperation Council (GCC) region particularly in the construction, oil and gas, healthcare and education sectors, and will follow the same investment strategy as its earlier funds. It will look to take either majority or strategic minority stakes in companies it invests in. Faisal Belhoul, founder and managing partner of Ithmar Capital, told PrivateEquityOnline.com that Ithmar expects to invest $50 milion to $150 million equity in each transaction, allowing it to commit to businesses with an enterprise value of between $50 million and $1 billion.
BAIN BUYS RIPPLEWOOD STAKE IN JAPANESE AUDIO COMPANY
Bain Capital Partners has agreed to pay approximately ¥47.7 billion ($444 million; E286 million) for D&M Holdings, a Japanese company that provides management and distribution for audio and video brands. Boston-based Bain will launch a tender offer for all shares of D&M at a price of ¥510 per share. The agreed share price represents a 37.1 percent premium over the average closing share price in the six months prior to 19 June. Upon the completion of the tender offer process, D&M will be delisted from the Tokyo stock exchange. In a separate agreement, the company's largest shareholder, RHJ International, has agreed to sell its 48.5 percent stake in the company to Bain. RHJ, previously called RHJ Industrial Partners, is a Brussels Euronext-listed affiliate of US buyout firm Ripplewood Holdings.