Funds & Investors – October 2008

Report: JPMorgan execs line up Indonesian fund * Nexus in India venture push * Chinese billions in TPG fund * Anchorage Capital sees first close for debut fund * Temasek doubles annual profit * Direct Capital to launch NZ$350m fund * Sequoia Capital India raises $725m * Advent bets on Japan * Blackstone gets $100m from Cathay

Report: JPMorgan execs line up Indonesian fund
The former head of JPMorgan’s Indonesian business Gita Wirjawan, and former JPMorgan energy banker Ivor Orchard, are reportedly raising a $300 million private equity fund to invest in Indonesia’s natural resources and infrastructure sectors. The fund will make investments in line with Islamic law, but will not be strictly Shariacompliant, Wirjawan said in an interview with a local newspaper, Reuters reported.

The two former bankers set up Ancora Capital Management and are drawing investments primarily from investors in Malaysia, Brunei and the Middle East. The firm has acquired a control stake in Apexindo Pratama Duta, an oil drilling firm, in partnership withMitra Rajasa, a transport company.

Wirjawan has, in previous roles, worked at JPMorgan, Singapore Technologies Telemedia and Goldman Sachs. He has also been on committees advising Indonesia’s President Susilo Bambang Yudhoyono on bio-diesel, renewable energy and infrastructure development, the report said.

Nexus in India venture push
Venture capital firm Nexus India Capital has raised $220 million for the close of its second India-focused venture fund. Nexus India Capital II will invest in early-stage companies that have significant market opportunities in India. It will focus on consumer services, business services, technology, clean tech and media. The firm invests in companies that are either wholly based in India, or have a substantial chunk of their operations there. From the new fund, the firm is looking to make about 20 to 25 investments, Atish Babu, an investment associate at Nexus, told PEI Asia. The firm’s previous fund was a $100 million vehicle that closed in July 2007. It has so far made 13 investments from Fund I. A few of its portfolio companies include Games 2 win, an online gaming website; Net Magic Solutions, an internet infrastructure andmanaged service provider; Suminter India Organics, an exporter of organic spices and other agro-products; and Unicon Investment Solutions, a retail financial services intermediary.

Chinese billions in TPG fund
Mega buyout firm TPG has closed three funds totaling about $30 billion. The firm has raised about $19.8 billion for TPG Partners VI, its sixth global buyout fund, sister website has learnt from market sources. It is the third largest buyout fund ever raised, after those closed last year by The Blackstone Group and Goldman Sachs. The fund was targeting between $18 billion and $20 billion. China’s State Administration of Foreign Exchange has reportedly committed $2.5 billion to the buyout fund.

The firm has also held a final close on roughly $4 billion for its Asian buyout fund, putting it in the league of Asian heavyweights CVC Asia Pacific and Pacific Equity Partners, both of who closed funds of similar sizes earlier this year. Finally, TPG has also raised about $6 billion for its distressed credit/financial services fund. South Korea’s National Pension Service agreed to commit $300 million to the credit fund which was thought to be targeting $7 billion for investing in troubled financial companies, mainly in NorthAmerica and Europe.

Anchorage Capital sees first close for debut fund
Anchorage Capital Partners, a newly established special situations private equity firm based in Sydney, has raised A$100 million ($83 million) for the first close of Anchorage Capital Partners I, its debut fund. The firm is looking to raise A$200 million for the fund by the end of November. The fund will focus on investments in Australia and New Zealand and will also commit to a few deals in other parts of Asia. The firm will invest in companies with enterprise values of between A$50 million and A$150 million, Mark Bayliss, a partner at the firm, told PEI Asia. While the firm will invest in special situations, it will not commit to terminally declining businesses. Bayliss said that investments will be made in previously strong companies that are under-performing, in orphans of large parent companies, and more generally in companies that are well established but mismanaged and under-performing. Anchorage will primarily invest in businesses that have a substantial tangible asset base in sectors such as manufacturing, distribution and some service-based industries.

Temasek doubles annual profit
Temasek Holdings, one of two Singaporean sovereign wealth funds, recorded an annual profit of S$18.2 billion ($12.8 billion) for the financial year ending March 2008, double that of last year. Temasek, which is owned by Singapore’s Ministry of Finance, is an active investor in the private equity asset class, and besides making direct private equity investments, has invested in a number of private equity funds managed by third parties. The value of the firm’s portfolio increased from S$164 billion to S$185 billion, a 13 percent rise. This $21 billion increase includes an infusion of S$10 billion by Singapore’s Ministry of Finance.

Though Temasek recorded its highest ever profits in the last financial year, its chairman S Dhanabalan warned that opportunities may be limited in the coming months. “The fallout of the credit crisis will continue to dampen the global economy over the next 24 months, with sharply escalated oil and food prices beginning to test inflation expectations,” he said in Temasek’s annual review. He added that Temasek is concerned with “the emerging risks of stagflation” as it “presents huge socio-political as well as economic risks in the next three to five years”.

Direct Capital to launch NZ$350m fund
New Zealand-focused private equity firm Direct Capital is to launch a NZ$350 million ($234 million) fund to make growth capital, pre-IPO and buyout investments in companies with enterprise values of between NZ$30 million and NZ$150 million. The firm has not generally maintained a sector focus and invests across broad themes, with a bias towards the food sector, traditionally a strong industry in the country, Direct Capital managing director Ross George told PEI Asia. The firm is currently investing out of Direct Capital Partners III, a NZ$130 million fund. It has made nine investments from the fund and deployed about 75 percent of its capital. The firm’s most recent investment was the acquisition of a 45 percent stake in New Zealand King Salmon Company in partnership with the company’s management. According to a source close to the deal, Direct Capital invested NZ$30 million in the company. The firm was established in 1994 and currently managesNZ$440million across seven funds.

Sequoia Capital India raises $725m
Sequoia Capital, which invests in China, India, Israel and the US, has raised $725 million for Sequoia Capital India Growth Fund II, almost double the size of its previous fund. The new fund will make late state, pre-IPO and PIPE investments in India in technology, retail, financial services and infrastructure companies. The firmis looking to invest between $20 million and $70 million per transaction.

The firm is currently investing out of Sequoia Growth Capital Fund I, a $400 million growth fund, and another $350 million venture fund. With the close of its second growth fund, the firm’s total assets under management across India-focused funds have grown to $1.8 billion. Sequoia Capital India has 12 investment professionals based out of Bangalore and Mumbai. The firm manages assets of about $10 billion globally.

Advent bets on Japan
Boston-based mid-market buyout firm Advent International has raised ¥60 billion ($572 million) for Advent Japan Private Equity Fund after marketing the fund since July 2007. This is the first fund raised by an international private equity firm for the Japanese mid-market, according to the firm. The fund will look to build a portfolio of between seven and 15 investments in sectors such as healthcare, life sciences, industrial, retail and consumer, and support services. It will invest in companies with enterprise values of between ¥5 billion and ¥50 billion, but could invest in larger companies in co-investments with other Advent funds.

“Not only has the private equity industry in Japan shifted from its initial focus on distressed situations and balance sheet restructuring to real, operationally-led value creation, but Japanese businesses have fundamentally embraced the need for enhanced global competitiveness in order to achieve long-term profit growth,” said Advent managing partner, John Singer, in a statement. Advent first opened its Japanese office in 2001.

Blackstone gets $100m from Cathay
Cathay Life Insurance, one of Taiwan’s largest insurance companies has invested $100 million in Blackstone Capital Partners VI, a buyout fund being raised by global alternatives manager The Blackstone Group. While this is not the first time the firm has invested in a private equity fund, “our underlying position is still very small”, an investment relations professional at Cathay told sister website She declined to provide more information.

However, a source close to the company said that Cathay Life Insurance started investing in third party private equity funds earlier this year. Beside the Blackstone commitment, it has also committed capital to an unlisted global infrastructure fund and a fund of funds. Cathay Life manages about $72 billion of assets as of March 2008. It is the flagship company of the Cathay Financial Holdings group, a Taiwanese financial services conglomerate.

Andrew Kuo, an independent non-executive director of Cathay Financial Holdings, is a managing director at Blackstone’s Hong Kong office and vice chairman for its Greater China operations.