With its new SVG Asia Fund of Funds, it could be argued that London-listed SVG Advisers bucked the trend of a normal fundraising. In most cases, the fund's strategy is worked out by the GP which then asks investors to buy into it. In this case, existing clients of SVG knew the strategy they wanted and asked the firm to deliver it.
Explains SVG director Sam Robinson: “We've been investing in the Asian region for some time through our existing global funds of funds programme and SVG Diamond [the firm's collateralised fund obligation arm]. But our clients wanted more Asia exposure than these two programmes could supply. They had the option of going to another manager or asking us to give them the additional exposure that they wanted.”
Having opted for the latter course, they demonstrated their appetite by committing $200 million to the fund – $50 million more than SVG had anticipated raising at the outset. Parent company SVG Capital committed $25 million to the fund, with the rest coming from high-net-worth individuals in the UK and Ireland and institutional investors across Europe. An “over-commitment strategy” will allow the fund to commit up to $260 million.
Robinson says the fund will have a diversified approach “across emerging markets and more established markets”. This diversification, he insists, is necessary in order to help manage the higher risk of Asia relative to Europe and the US. The fund has already made four commitments to: CVC Capital Asia Pacific III; Navis Capital Partners Asia V; Affinity Equity Partners III; and Actis India III. SVG says it will invest in between 12 to 15 funds in total.
The closing of the fund coincides with SVG's opening of a new Singapore office headed by Simon Lund. khim Tan, who has joined SVG from Hermes Private Equity's fund of funds team, will spend “several months” in the London office before moving to Singapore as head of Asian fund investment.
SVG Advisers is the private equity fund management and advisory business of SVG Capital, a London Stock Exchange-listed firm that invests principally in private equity funds managed or advised by international private equity firm Permira.
AIG KEEPS EXPANDING IN JAPAN
AIG Investments has appointed Michael Chae to help guide the expansion of the firm's alternative investment activities in Japan, where he will focus on private equity and distressed securities. Chae, who will report to Stewart Homler, managing director of AIG's alternative investments in Japan, was most recently a director in Nikko Citi's fixed income group. “AIG Investments is looking to build their alternative investment capabilities in Japan, where they haven't had a presence in the past,” an AIG Investments spokeswoman said. “We're in the process of assessing demand and where AIG Investment's expertise will fit in the market.” The company wouldn't comment about what specific sectors it is exploring. The spokeswoman also wouldn't comment about how the declining financial situation at AIG Investment's parent company, American International Group, could impact the planned expansion in Japan.
DESHPANDE HEADS FOR NEW PASTURES
Bala Deshpande, a senior director of investments at ICICI Venture, one of India's largest private equity firms, is leaving the company. Deshpande is reportedly headed to New Enterprise Associates in India, according to a source. NEA makes mid- to latestage investments in India. It also invests indirectly in the country through NEA-IndoUS, a venture capital firm focussed on technology and technology-enabled services. The venture firm could not be reached for comment. Deshpande joined ICICI Venture in 2000. She identified investment opportunities in sectors such as retail, media, information technology, IT-enabled services and telecom, and executed 10 exits.
JPMORGAN DUO RAISING INDONESIA FUND
Gita Wirjawan, formerly the head of JPMorgan's Indonesian business, and Ivor Orchard, former energy banker at JPMorgan, are reportedly raising a $300 million private equity fund for Indonesia. Wirjawan and Orchard set up Ancora Capital Management and are drawing commitments mainly from investors in Malaysia, Brunei and the Middle East for their new fund, Wirjawan said in an interview, according to a Reuters report. The fund will invest in Indonesia's natural resources and infrastructure sectors. It will make investments that are guided by sharia principles, but will not be strictly sharia-compliant.
CINVEN ADDS TO HONG KONG TEAM
London-based private equity firm Cinven is expanding its Hong kong team by adding Joseph Wan as partner and Richard Cheung as principal. Both will be based out of London until the new Hong kong office officially opens early next year. Wan is joining Cinven from The Boston Consulting Group's Hong kong office, where he has been a partner and managing director since 2001. Cheung is joining Cinven from Mckinsey's Hong kong office, where he was a partner. Wan has consulting experience in consumer elect ronics retailing, construction materials and furniture retailing, snacks and beverages, cosmetics, airlines and the auto industry. Cheung has consulting experience in the retail and consumer sectors as well as gaming and manufacturing.
FIRST CLOSE FOR RIVERSIDE'S DEBUT ASIA FUND
The Riverside Company, a US-based global mid-market investor, is raising its first Asia-focussed fund targeting $100 million and has had a first close on $25 million. The Riverside Asia Fund I comes at a time when the firm is looking to expand its footprint across Asia. It has made two investments in the region so far, the most recent of which was the acquisition of Wiz korea, a preschool education franchise in South korea, for an undisclosed sum. Its first acquisition was that of Japanese parking lot operator Shinsouki in January this year. Though the firm has made two investments directly from its Asian fund, it has invested earlier in Thailand, China and Japan through its North American portfolio companies, said Stu Baxter, managing partner at the firm and head of its Asian fund and investment activity.
JAPANESE MID-MARKET TARGETED BY ADVENT
Advent International, the Boston-based mid-market buyout group, has closed its Japan Private Equity Fund on ¥60 billion (€395 million; $560 million) after marketing the fund since July 2007. The fund, which Advent says is the first fund raised by an international private equity firm to focus on the Japanese mid-market, will look to build a portfolio of between seven and 15 investments in Advent's favoured sectors of healthcare and life sciences; industrial; retail and consumer; and support services. The fund will typically invest in companies with enterprise values ranging from ¥5 billion to ¥50 billion, but has the option of investing in larger businesses via co-investment with other Advent funds.
CHINA CUTS IPO LOCK-UP PERIOD
The Shanghai and Shenzhen Stock Exchanges will from October allow private investors to offload their stakes in listed companies after one year, move that will benefit private equity firms investing in China. Earlier, funds investing in companies within 12 months before the company listed its shares had to wait 36 months to divest their stakes. Private equity firms have so far been reluctant to invest in pre-IPO deals as a three year lock-up period puts constraints on firms seeking to exit their investments. The change is likely to increase the amount of private equity capital being invested in the country.
MEATY TRANSACTION FOR AUSTRALIAN GP
Anchorage Capital Partners, a newly established special situations private equity firm, has acquired Australian small goods manufacturer Hans Continental Smallgoods from Japan Tobacco for an undisclosed sum. The investment was made from Anchorage Capital Partners I, the firm's A$200 million (€115 million; $166 million) debut fund, which has raised A$100 million for the first close. The fund is expected to see a second and final close at the end of November this year. It will focus on investments in Australia and New Zealand and will also commit to a few deals elsewhere in Asia. Established in 1960, Hans' product range includes bacon, ham and fresh meat products. The company has three main processing units and is headquartered in Brisbane.
H&Q WRAPS UP SECOND KOREA FUND
South korean private equity firm H&Q Asia Pacific has raised W372.5 billion (€228 million; $332 million) for its second koreafocussed fund and expects to close a third fund soon on as much as $150 million. The second fund, H&Q Private Equity Fund II, has been raised entirely from domestic investors, with South korea's $233 billion National Pension Service as the anchor investor, an investment professional at H&Q Asia Pacific told PrivateEquityOnline.com. The pension committed $200 million. The mid-market fund has a sevenyear investment period and will target manufacturing, consumer industries and financial companies with steady cash flows, the professional said. The firm is simultaneously in the market with another fund, korea Alternative Capital Partners, which is being raised entirely from overseas investors and is targeting between $100 and $150 million. It is expected to close in a month or two.
CATHAY BACKS BLACKSTONE
Cathay Life Insurance, one of Taiwan's largest insurance companies, has invested $100 million in Blackstone Capital Partners VI, a $20 billion buyout fund being raised by global alternatives manager The Blackstone Group. An investment relations professional at Cathay Life told PrivateEquityOnline.com in an email that this is not the first time the company has invested in a private equity fund, “but our underlying position is still very small”. She declined to provide further information about the company's private equity activity. Cathay Life Insurance started investing in third party private equity funds earlier this year, according to a source close to the company.
MORGAN STANLEY IN JAPANESE TAKE-PRIVATE
Morgan Stanley Private Equity Asia has agreed the maiden Japanese investment from its third Asian fund, tending an offer to take Osaka-listed clothing company Ten-Arrows private in a management buyout. The offer has been agreed by the Ten-Arrows board of directors. MSPEA already has a toe-hold investment of 27.8 percent of the company's share capital, and if the ¥800 per share offer is successful, it will vacuum up the remaining shares for a consideration of ¥11.2 billion (€73 million; $104 million). The transaction values Ten-Arrows at around ¥15.5 billion. katsuya Hayashi, a member of the company's founding family and the incumbent chief executive officer, will remain at the business' helm following the transaction.