Siguler Guff backs SE Asia fund

The New York-headquartered fund of funds has committed up to $20m to Creador's second vehicle as it finalises its first two deals.

Southeast Asia-focused private equity firm Creador has raised between $10 million and $20 million from US fund of funds Siguler Guff, a first time investor in the firm, a source close to the matter revealed to Private Equity International. 

Siguler’s commitment takes Creador’s Fund II to $122 million, the source said, having made a first close on $106 million in August this year. 
The first close was largely existing LPs, but the firm has said previously it believes it will attract North American and European institutional investors, who are showing increasing interest in Southeast Asia as China and India slow. 

[The firm] is currently in discussions with three or four leading institutions where the cheques are in the $20 million-plus range so they feel they will cross the $200 million mark by year-end.

PEI's source

Creador will have raised about $200 million by the end of the year and is on track to make a $250 million final close in early 2014, according to the source. 

“[The firm] is currently in discussions with three or four leading institutions where the cheques are in the $20 million-plus range so they feel they will cross the $200 million mark by year-end,” he explained. 

Creador is also in the midst of closing its first two deals from its latest vehicle. Fund I, a $130 million vehicle with a 2012 vintage, is fully invested. 

While expecting to announce a $22 million Indonesia investment in the coming weeks, the firm said it has also offered to back GHL Systems Berhad in buying all shares of Malaysian payment services business, e-pay Asia.

The GHL acquisition of e-pay Asia is now subject to shareholders' and regulatory approval and values the target company at MYR 69 million (€16 million; $21.7 million), the statement said. 

In total, Creador’s investment in the combined company, which will likely operate under the GHL name, will be between $12 million and $15 million to own a 25 to 30 percent of the business, according to Brahmal Vasudevan, founder and chief executive of Creador. 

Both GHL and e-pay Asia are payment services businesses, but the companies have different customer bases. GHL is mostly focused on servicing banks and merchants, while e-pay Asia’s customers are mostly merchants and telephone companies.

“In general globally there is a shift towards credit and debit payments and in Asia, of course, we are behind the West in terms of to what extend credit and debit is used – but that is changing rapidly as the use of credit and debit cards rises,” Vasudevan explained to PEI.

“So [the strategy is based] on two shifts – one is the shift from cash to credit and in Asia now the growth of credit is taking off; secondly there is the whole shift towards e-commerce and in e-commerce there is the need to provide virtual or electronic payment solutions.”

Like many private equity investors taking advantage of higher growth markets, particularly Asia, Siguler Guff has also been active in strengthening its emerging markets programme recently, hiring Jay Koh as a partner in December last year. 

Koh joined Siguler with a wealth of emerging markets private equity experience. He led the Overseas Private Investment Corporation’s $2.6 billion emerging markets private equity programme, oversaw 33 funds and helped manage $15 billion portfolio of political risk insurance, direct finance and private equity investments, PEI reported earlier.

In May last year, Siguler also set up a $100 million separate account for Australian superannuation fund HostPlus to invest in China.