Candover opens first Asia office(2)

The Asia push comes as the firm is looking to buy a 25 percent stake in UK insurance company Towergate.

Candover has opened an Asia office in Hong Kong having recruited Jamie Paton who set up 3i’s North Asia office where he worked for seven years, according to Paton.

Candover is also in preliminary discussions to take a 25 percent stake in UK insurance company Towergate valuing the company at about £3 billion, according to a source close to the deal. She said discussions were at an early stage. Candover declined to comment about the Towergate deal.

The unusual decision to take a minority stake comes as buyout firms continue to look to more innovative ways to do deals following the problems in the credit markets.

Separately Paton arrives at Candover having left 3i last year to drive a camper van and surf his way around Australia now his children have grown up.

He said he was going to enjoy helping Candover find its way in the Asian market.

“There has been a tremendous development in Asia over the last five years and there are a number of compelling macroeconomic factors which have produced strong results for the number of the private equity funds already in Asia.” He said the office opening had been driven not only by the possibility of more deals, but by a push from a number of the Candover portfolio companies, which had Asian operations or were looking to strengthen their connections in Asia.

“You read the press every other day and there is something about an Indian business acquiring European groups. Yet the levels of private equity activity across Asia is still very limited; even the most mature market in Japan is still very very small when you compare it with the US and Europe.”

Paton said the high volatility of Asian markets made it a highly exciting place to do business. He will be looking for locals with knowledge of the Japanese, Chinese and Indian markets as he helps Candover make its first steps into the region.