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Headlines
Industry News "Blackstone Buys 20 Percent Stake in Chinese Chemical Company" (Asia) "Will the Subprime Mess Affect Indian PE?" (Asia) "Investor Seeks the 'Next China' in Vietnam" (Asia) "ICICI to Set Up $2 Billion India Infrastructure Fund" (Asia) "Former Citi Head Targets $1bn Sub-Saharan Fund" (Africa) "Africa: A New Frontier for Emerging Markets" (Africa) "Brysam Global Partners Completes US$228 Million Equity Investment in Ixe Grupo Financiero" (Latin America and the Carribean) "Enterprise Battles to Save Pole Position" (Central and Eastern Europe and Russia) "Franklin Buys Into Dubai Money Manager" (Middle East) "Foreign Private Equity Funds March Into China's Real Estate Market" (Asia) Industry News "Blackstone Buys 20 Percent Stake in Chinese Chemical Company" (Asia) Wall Street Journal (09/10/07) Carew, Rick; McMahon, Denis In its first private equity deal in China, Blackstone Group has agreed to acquire a 20 percent stake in chemical producer China National BlueStar, a wholly owned unit of state-owned China National Chemical Corp., for $600 million. The deal, which awaits regulatory approval, was made possible by China's purchase of a $3 billion stake in Blackstone in May, the first major investment by the Chinese government under plans to diversify its foreign-exchange holdings with an eye toward higher yields. Industry players are waiting to see how the link between Blackstone and China will help Blackstone in local deals. Return to Headlines "Will the Subprime Mess Affect Indian PE?" (Asia) Economic Times of India (09/07/07) Natarajan, Arun Funds dedicated to India are ready to step into any vacuum that may develop due to the U.S. subprime mortgage crisis. While the crisis has placed many big deals in Europe and the United States on hold, the nature of these deals differ from the ones private equity firms typically enact in India. Most private equity transactions in the United States and Europe are buyout investments that involve taking on significant portions of debt to acquire publicly listed companies. In India on the other hand, of the 302 private equity investments tracked by Venture Intelligence in 2006, just 14 were of the buyout variety, and only one, the KKR buyout of Flextronics Software, was valued at over $100 million. While the 2001 economic downturn saw global private equity turning away from India, 40 percent of all private equity investment in India today originates from India-dedicated funds. Thus, even if the global funds leave the Indian market, private equity firms like ChrysCapital and Sequoia Capital India will have money to spend locally over the next few years. In fact, Indian funds, facing less competition from their global counterparts, may end up seeing more attractive valuations than seen over the past two years. Return to Headlines "Investor Seeks the 'Next China' in Vietnam" (Asia) Wall Street Journal (09/08/07) P. B1; Santini, Laura In the past, Vietnam's economy would have been less exposed to external financial pressures like the U.S. subprime-debt crisis, but its opening has exposed it to global shocks, which is good news for some private equity and other investors focused on the country who hope to take advantage of banks' reluctance to offer financing for major private projects. For example, VinaCapital is negotiating a deal with a private hospital, a chance that arose only after international banks backed down from providing the hospital a loan. And the company has been able to negotiate a lower price for a stake in a sugar manufacturer partly because of the global pullback. Private equity and venture capitalist investments in Vietnam have totaled $386 million since 2006, reports Asian Venture Capital Journal, more than fourfold the total invested in the previous two years combined. Vietnam is seen by many as the "next China." Its manufacturing-based economy is growing at a more than 8 percent annual rate. The total market capitalization of companies listed on its exchange increased 10-fold last year, with its main index rising 144 percent. Return to Headlines "ICICI to Set Up $2 Billion India Infrastructure Fund" (Asia) Bloomberg (09/07/07) Rangan, M.C. Govardhana India's ICICI Bank is seeking overseas investments for a planned $2 billion Indian infrastructure fund with an eye toward ending fundraising within three months. A lack of infrastructure is seen as constraining growth in India, whose government is committed to spending $320 billion on infrastructure projects to ease bottlenecks. Highways, for example, which move nearly 80 percent of all goods in India, account for just 2 percent of the country's road network. Furthermore, it currently takes an average of 85 hours to unload and reload ships at India's major ports, 10 times the amount of time it takes in Hong Kong and Singapore. In February, Citigroup, Blackstone, and Infrastructure Development Finance agreed to invest $250 million each in an Indian infrastructure fund that will invest $2 billion in companies. In August, Europe's 3i Group said it would invest at least $250 million in an Indian infrastructure fund that was set to raise $1 billion. Return to Headlines "Former Citi Head Targets $1bn Sub-Saharan Fund" (Africa) Financial News (09/06/07) Kerr, Duncan New private equity firm Capitau of London is seeking to raise a $1 billion buyout fund that will target sub-Saharan companies in infrastructure, finance, and consumer-related industries. Among the countries the firm is interested in investing in are Tanzania and Mozambique. Capitau is the latest private equity firm to show interest in the region. Pamodzi Investment Holdings, which promotes black empowerment in South Africa, plans to raise a $1.3 billion fund, which would make it the largest of its kind in the country. April saw the largest private equity buyout ever in South Africa with the $3.5 billion acquisition of clothing retailer Edgars Consolidated Stores by Bain Capital. Return to Headlines "Africa: A New Frontier for Emerging Markets" (Africa) Telos-eu (France) (09/08/07) Santiso, Javier Africa is becoming a hot spot for private equity investment aimed at emerging markets, drawing nearly $3 billion in private equity so far in 2007. Leading the charge are such firms as Renaissance Capital, which last spring announced the raising of a $1 billion pan-African fund. A little later, Pamodzi Investment Holdings of South Africa announced a $1.3 billion pan-African fund backed by American investors. Formerly, private equity was primarily focused on South Africa, but Kenya, Ghana, and Botswana are beginning to catch the eye of investors. Blakeney Management has invested in Angola, Mozambique, and Ethiopia. Senegal's telecom sector has also drawn private equity investment. Return to Headlines "Brysam Global Partners Completes US$228 Million Equity Investment in Ixe Grupo Financiero" (Latin America and the Carribean) Business Wire (09/07/07) U.S. private equity firm Brysam Global Partners has completed its acquisition of a 28 percent stake in Mexican financial institution Ixe Grupo Financiero for $228 million. Brysam focuses on consumer financial services in emerging markets. It is headed by former Citigroup president and COO Robert Willumstad and former Citigroup Global Consumer Group CEO and chairperson Marge Magner. Return to Headlines "Enterprise Battles to Save Pole Position" (Central and Eastern Europe and Russia) Financial News (09/07/07) Davey, Nicolette Enterprise Investors, which was launched in 1990 as part of a U.S. government effort to encourage the Polish private sector, is facing stiff competition from other private equity firms in the region. Since its launch, Enterprise has invested more than EUR1 billion in more than 100 companies. Focused on central and eastern Europe, it has moved beyond Poland over the years into such markets as Romania, Hungary, Slovakia, and Bulgaria. It is now targeting expansion in the Czech Republic as well as Latvia, but has reserved larger investments for Poland and Romania. Meanwhile, Carlyle Group has opened a new operation in Warsaw to target central and eastern European buyouts in the retail, consumer, financial services, and IT sectors. Bridgepoint has also opened a local office to tap the regional buyout market. Private Equity Intelligence says that Copernicus Capital Partners and Avallon are also looking for regional opportunities, though both are seeking to raise under EUR100 million. But Enterprise's greatest competition for now comes from Mid Europa, which is raising a EUR1.25 billion regional fund, which would make it the largest of its kind. U.S. private equity firm AIG Global Investment Group in May completed the region's largest buyout with the EUR1.66 billion acquisition of Bulgarian Telecommunications. Return to Headlines "Franklin Buys Into Dubai Money Manager" (Middle East) MSNBC (09/05/07) Brewster, Deborah Franklin Resources has acquired a 25 percent stake Dubai asset manager Algebra Capital with an eye toward regional growth. Franklin's private equity arm will work with the Algebra to identify local investment opportunities. Franklin will also develop Algebra's private equity business, capitalizing on its experience. Franklin has used a similar strategy to gain a toehold in other local markets outside the United States. Typically, it initially buys a minority stake in a company and later buys out the remainder. Return to Headlines "Foreign Private Equity Funds March Into China's Real Estate Market" (Asia) Asia Pulse (09/07/07) A new Zero2IPO study shows that Chinese real estate projects are attracting a solid rate of investment from foreign private equity funds. According to the study's authors, the 2008 Beijing Olympic Games, the 2010 Shanghai World Expo, and the yuan's anticipated appreciation have caused foreign private equity funds to accelerate their investments in the country. Now, thanks to such factors as economic globalization and China's improved investment climate, the Chinese real estate market is more open than ever to outside investment. Zero2IPO's research shows that private equity funds reported 31 investment cases in China's property sector last year, with investment involved topping the $3 billion mark. Return to Headlines
Abstract News © Copyright 2007 INFORMATION, INC. |
13 September 2007
Emerging Markets Private Equity NewsWatch provides a selection of noteworthy articles pertaining to private equity investing in emerging markets and is distributed weekly to a wide audience. The Emerging Markets Private Equity NewsWatch is a publication of the Emerging Markets Private Equity Association. For more information on EMPEA, please contact: To advertise, contact: Emerging Markets Private Equity Association  |