Through a secondary transaction, Spice Private Equity acquired a LP stake in Quvat Capital Partners II, a private equity fund managed by Quvat, a leading Indonesian private equity fund manager with a deep local network.
The fund is a 2007 vintage with more than USD 200 million of capital commitment. The 12 portfolio companies operate in a broad array of industries including financial services, entertainment, mining, logistics and real estate. The assets are mostly based in Indonesia with some exposure to neighboring countries such as Singapore and Malaysia.
The investment represented an opportunity to purchase a mature fund position at an attractive price. It provides exposure to a diversified portfolio of companies in Indonesia, which is one of the largest countries in the world in terms of population and GDP and one with the highest GDP growth expectations.
> Quvat Capital Partner II is fully invested and out of its investment period.
Photo: Jakarta, Indonesia
Spice Private Equity acquired through a secondary transaction an LP stake in DLJ South America Partners, a private equity fund managed by Victoria Capital Partners, a regionally dedicated private equity manager with a broad geographic coverage in South America covering Brazil, Chile, Colombia, Peru and Argentina.
Victoria Capital Partners was formed in 2006 through the spin-off of DLJ South America Partners from Credit Suisse and has capital commitments of over USD 1.7 billion in aggregate. Victoria Capital Partners is currently comprised of 14 investment professionals in three regional offices in South America: Buenos Aires (Argentina), São Paulo (Brazil) and Bogotá (Colombia).
DLJ South America Partners is a 2007 vintage fund with total commitments of approximately USD 300 million. The fund has been highly successful and still holds a quality portfolio which should create further substantial upside. The 4 portfolio companies operate in the financial services, healthcare and consumer industries.
The investment represented a further step in the implementation of Spice Private Equity’s overall emerging markets strategy and is the first investment in Latin America since the strategic repositioning of the Company. The opportunity has been proprietarily sourced.
Photo: São Paulo, Brazil
Through a secondary transaction bidding process, Spice Private Equity acquired from a third party, LP stakes in GP Capital Partners IV, Magma Fund and Magma Fund II, a portfolio of private equity investments managed by GP Investments.
GP Capital Partners IV is a 2007 vintage fund with total commitments of approximately USD 1.27 billion. The fund still holds 3 investments with substantial upside potential. The 3 portfolio companies operate in the refractories, hospitality and business services sectors. Magma Fund and Magma Fund II are two funds set-up for the investment in a refractories company in Brazil (also present in GP Capital Partners IV).
GP Investments is a Latin American diversified asset management company with private equity investments focused on the acquisition of companies with high potential for value creation (total USD 3.5 billion invested in PE since 1993). GP Investments is also the largest shareholder in Spice Private Equity and the parent company of GP Advisors, Spice Private Equity’s investment manager.
The investment represents a further step in the implementation of Spice Private Equity’s overall emerging markets strategy adding an established GP to the portfolio and increasing the proportion of Latin American secondary transactions.
Spice Private Equity has completed a secondary transaction, acquiring LP interests in NYLIM Jacob Ballas India Fund III, LLC, Tara India Fund III, LLC, GP Capital Partners IV, L.P., and GP Capital Partners V, L.P.. The total private equity exposure acquired is USD 20.0m.
NYLIM Jacob Ballas India Fund III, LLC, (“Fund III”) is a 2008 vintage fund with USD 439 million total commitments and managed by NYLIM Jacob Ballas Asset Management Company III, LLC (“AMC”), a Mauritius company. Including Fund III, AMC and its affiliates have raised 3 India focused private equity funds, managing over USD 600 million in capital. Fund III has a diversified portfolio with exposure to infrastructure, healthcare, financial services and business services sectors.
Tara India Fund III, LLC is a 2008 vintage fund with USD 225 million total commitments and managed by IL&FS Investment Managers Limited ("IIML"), the private equity arm of IL&FS. IIML has been part of IL&FS since 1996 and has raised and managed 16 funds with the current AUM of USD 3.85 billion. Fund III has a diversified portfolio with exposure to infrastructure, consumer, industrial, business services, natural resources sectors and real estate.
GP Capital Partners IV, L.P., and GP Capital Partners V, L.P., are two partnerships managed by affiliates of GP Investments, Ltd., one of the most established private equity investors in Latin America, having invested over USD 3.5 billion in 53 companies across 15 different industries since its inception in 1993. GP Investments targets large-cap opportunities with strong potential for management and operational improvements. GP Capital Partners IV is a 2007 vintage partnership with total commitments of approximately USD 1.27 billion. The partnership still holds 3 investments with upside potential. The 3 portfolio companies operate in the refractories, hospitality and business services sectors. This LP interest acquisition increases the exposure to this partnership, following the transaction completed earlier this year in April 2015.
GP Capital Partners V is a 2008 vintage partnership with total commitments of approximately USD 1.05 billion. The partnership still holds 3 investments in the consumer and mining sectors with potential for future growth.
This secondary transaction represented a further step in the implementation of Spice Private Equity’s overall emerging markets strategy adding established GPs to the portfolio and increasing the allocation to secondary transactions in Asia and Latin America.
Photo: New Delhi, India
Carlyle has established an experienced team comprised of African nationals with many years of combined experience; it has offices in Johannesburg, South Africa and Lagos, Nigeria. The fund has closed at approximately USD 690 million.
Carlyle targets both control investments and minority investments and employs a thematic investment process focused on sectors with high growth potential, low cost production advantages, low penetration, and those that are undergoing liberalization. The fund has a pan-regional focus and should deploy capital across the Sub-Saharan Africa region (“SSA”).
The investment fits Spice Private Equity in terms of diversification and size. SSA presents a highly compelling market opportunity based on its accelerating and diversified economic growth, favorable demographics, urbanization trends, improving macroeconomic environment and political stability.
Additionally, the private equity industry is still underpenetrated with total deals in 2013 representing only 0.2% of GDP according to EMPEA. SSA attracts a fraction of the world’s private equity capital compared with other emerging regions, notably Asia and Latin America. However, interest has increased recently, buoyed by strong economic growth.
> As of 31 December 2014, Carlyle Sub-Saharan Africa Fund has made 4 investments.
Photo: Johannesburg, South Africa
Helios Investment Partners (“Helios”) is one of the leading private equity managers in Africa. The team has just raised its third fund of approximately USD 1.1 billion, which is the first Africa-focused private equity fund with more than one billion dollars in capital.
Established in 2004, the firm has offices in London, Lagos, and Nairobi, and a team of over 25 professionals. It has completed investments in the region’s most significant countries, including Nigeria, Ghana, Kenya, Tanzania, Angola, South Africa and Morocco. Helios is complementary to Spice Private Equity’s commitment to Carlyle Sub-Saharan Africa Fund. The fund will target growth equity investments in sectors exhibiting high growth potential and acquisitions of large, established businesses. The manager has deep local and international networks, a breadth of private equity transaction expertise, and a high degree of hands-on operational involvement. This positions Helios to generate strong, risk-adjusted returns from investments in the African market.
> As of 31 December 2014, Helios has made one investment through Fund III.
Photo: Nairobi, Kenya
Navis is one of the leading private equity managers in Southeast Asia with a large and institutional team. Founded in 1998, Navis manages over USD 5 billion of capital commitments with almost 100 employees spread over eight offices in Asia.
As of 31 December, 2014 Navis Asia Fund VII was close to its hard cap of USD 1.5 billion. Navis has an investment strategy focused on control buyouts with minimal leverage in high growth companies in a region dominated by minority growth capital investments.
Its geographic focus is primarily on South and Southeast Asia, which has one of the most attractive macroeconomic growth and demographic trends going forward.
The investment in Navis fits well with Spice Private Equity's portfolio strategy in terms of geography, industry diversification and size. It represents a good complementary fit to the commitment in Baring Asia VI in both geographic coverage and investment size.
> As of 31 December 2014, Navis Asia Fund VII has made three investments.
Photo: Kuala Lumpur, Malaysia
Baring Asia is a highly experienced pan-Asia private equity manager, having raised and invested USD 5 billion across five funds. Baring Asia Fund VI had raised close to its hard cap of USD 3.85 billion.
Established in 1997, Baring Asia has depth of presence in the region with seven offices and over 100 professionals in its team. Baring Asia seeks to make both control and significant minority investments in high-growth companies on a country and pan-regional basis. Asia has favorable macro-economic and demographic trends, as well as the increase in the purchasing power of the growing middle class. The manager seeks to take advantage of these favorable tailwinds by leveraging its cross-border network and the collective knowledge of its team to facilitate the growth of its portfolio companies.
These themes resonate and are consistent with Spice Private Equity's investment thesis of tapping into the growth of the middle class. Baring Asia’s coverage and fund size dovetails well with Navis Fund VII, which is primarily focused on Southeast Asia. Furthermore, Spice Private Equity has already completed one co-investment with Baring Asia in Giant Interactive.
Photo: Hong Kong, China
The Northstar Group (“Northstar”) is a Singapore headquartered private equity firm managing more than USD 2.1 billion in committed equity capital dedicated to investing in growth companies in Indonesia and to a lesser extent, other countries in Southeast Asia.
Since its founding in 2003, Northstar has raised five private equity funds and invested in more than 30 companies across the banking, insurance, consumer/retail, oil and gas, coal and mining services, telecom, and agribusiness sectors. Northstar has invested over USD 2.2 billion with its co-investors in the Southeast Asian region. Northstar’s newest fund, Northstar Equity Partners IV Limited (“Northstar IV”) has recently closed with USD 810 million of committed equity capital.
The investment fits Spice Private Equity’s portfolio strategy in terms of geography, industry diversification and size. Indonesia presents a highly compelling market opportunity based on the accelerating and diversified economic growth, favorable demographics, improving macroeconomic environment and political stability. Northstar IV represents a complementary fit to the existing Asian primary commitments in Baring Asia VI and Navis Asia VII in both geographic coverage and investment size.
As of 30 September 2015 Northstar IV has made two investments in Indonesia.