TPG Indonesia venture Northstar raises $110 million

Northstar, one of a very small handful of Indonesia-focussed private equity fund managers, has raised $110 million for a debut fund, which attracted a $15 million commitment from TPG Capital.

Northstar, a TPG Capital-backed group in Indonesia, has raised $110 million for a debut fund. Founded by Glenn Sugita and Patrick Walujo as a merchant bank in 2003, Northstar decided in 2006 to raise a private equity fund after TPG Capital agreed to back the firm with capital as well as resources.

Sugita was working in PwC Securities before joining forces with Walujo, a former investment banker, to launch their own merchant banking business in 2003. Walujo was at that time working in Tokyo with Pacific Century Group and had wanted to return to Indonesia, he told PEO in a recent interview.

Northstar make minority-stake investments “with our own principal capital” in addition to being engaged in corporate advisory work, Walujo said.

The boutique merchant bank advised on an oil field acquisition and participated as a minority investor in the deal. It was also the advisor on the $1 billion leveraged buyout in 2005 of PT Adaro, the largest coal mine in Indonesia and the largest buyout to date in the country, Walujo said. Northstar had invited the Government Investment Corporation of Singapore, Robert Kuok, a Malaysian tycoon, Farallon Capital, and TPG to participate in the transaction.

TPG, which holds a 15 percent stake in Northstar debut fund, had initially wanted Walujo and Sugito to establish TPG Indonesia, but the duo preferred to remain independent, having already established their own business, Walujo told PEO.

“Indonesia has been on and off [foreign] investors’ radar, and we wanted to have a permanent presence here,” Walujo said, adding a compromise was reached for Northstar to offer TPG “speed and [a] presence on the ground” while it gained access to the established buyout firm’s know-how, resources and access to the capital market.

As part of the link-up, Tim Dattels, a partner at TPG in San Francisco and the main driver behind TPG and Northstar’s alliance, sits on the fund’s investment committee. Ashish Shastry, a Singapore-based TPG executive director responsible for the firm’s Southeast Asia investment coverage, is an observer on the committee.

The fund has attracted 13 investors excluding TPG which committed $15 million. Northstar has made four investments to date. Earlier this year, Northstar partnered TPG in the acquisition of a 72 percent stake in Bank Tabungan Pensiunan Nasional for a reported $200 million.