The Rohatyn Group (TRG), the US emerging markets-focused hedge fund group, has taken a 60% stake in Singapore-based private equity firm CapAsia, in a deal that will give TRG exposure to infrastructure investment in emerging Asian markets.
TRG is paying an undisclosed sum to acquire 60% of CapAsia from Malaysia’s CIMB Group, which will hold the remaining 40%. Additionally, the transaction will also give TRG 60% of the general partner (GP) interest in “some” of CapAsia’s three existing vehicles: the South East Asian Strategic Assets Fund, Islamic Infrastructure Fund, and Babcock & Brown’s Asia Infrastructure Fund, which have a combined AUM of $400 million.
CapAsia is in the process of raising capital for a new vehicle, the Asean Infrastructure Fund III, with a target of $300 million, but TRG did not say whether the firm will take a GP interest in the fund. CapAsia invests in the infrastructure of emerging Asian economies, with the exception of China and India. It has offices in Singapore, Kuala Lumpur, Jakarta, and Bangkok.
TRG’s investment marks a second change in ownership of CapAsia since its founding in 2006 as CIMB Standard – originally a joint venture between CIMB and Standard Bank of South Africa. The firm was rebranded as CapAsia in 2010 in a move that preceded Standard Bank's exit from the joint venture last year, which left CIMB as the sole shareholder.
TRG chief executive Nicolas Rohatyn, says the CapAsia deal is part of the firm’s strategy to grow its private investing business in Asia, where it is focusing on the infrastructure and property sectors. TRG last year acquired a 50% stake in Hong Kong-based emerging markets private equity firm Arch Capital from Philippine conglomerate Ayala Corporation and subsidiary Ayala Land for an undisclosed sum.
Arch, which focuses on Asian emerging markets property investment, is in the process of raising capital for a new fund, TRG Asian Partners LP, which has a target of $500 million.
A June 2011 poll of infrastructure investment consultants by research firm Preqin found that 50% believe Asia would provide attractive investment opportunities over the next 12 months, given the growing demand for infrastructure development in the region’s emerging economies. It compares with 47% of respondents who held the same sentiment for Europe, and 37% for the US.