Orion partners Bluebell to launch PE fund for brands

Two Hong Kong-based firms have struck an exclusive alliance as co-general partners (GPs) to run a private equity fund investing in luxury brands, AsianInvestor has learned.

This marks the first time that luxury brand distributor Bluebell Group has been involved in such a tie-up, says TK Chiang, managing partner of Orion Partners, an alternative investment firm and Bluebell’s co-GP.

The fund seeks to partner with mainly European brands to target the consumer sector in China. It will first-close in the next few months and aims to final-close at $300 million in the next year or so. So far, the money raised has come fairly evenly from institutional investors and family offices, and Chiang expects that to be the case at final close.

The two GPs will provide capital, expertise and a platform for the brands’ Asian expansion, and it is also backed by prominent Asian groups such as RH Group of Malaysia.

The fund is a 10-year vehicle specialising in mid-cap deals, so the typical ticket size will be between $10 million and $50 million. The focus will be on buyout/joint-control transactions, noted Chiang, although the fund has a side pocket for non-control deals.

He says Orion approached Bluebell – which was founded in 1954 – about a partnership because of the latter’s deep experience and reputation in this market.

“It’s pretty easy to figure out who are the dominant players in luxury in Asia,” he adds. “Bluebell is an organisation that’s been around since the 1950s – they have brought numerous luxury brands to Asia.”

Asked how this fund will stack up against the competition, Chiang says there are a limited number of dedicated luxury brand funds in Asia. Moreover, he adds, the tie-up with Bluebell gives the vehicle specialist operational expertise that most other players do not have in this space.

There certainly appears to be demand for luxury-brand vehicles. Last August L Capital Asia, the Asian PE arm of European luxury group LVMH, final-closed its second fund at $1.005 billion, having launched it in March 2013 with an initial target of $800 million.

In addition to private equity, Orion manages real estate and hedge fund assets for institutional investors and family offices, and runs about $1 billion in AUM.