TPG Capital, the private-equity firm that manages $47 billion, said it plans to make more investments in companies in the developing world, including PT Bank Tabungan Pensiunan Nasional, which it controls in Indonesia.
“Private-equity investing will become much more dominated by emerging markets,” said Ashish Shastry, TPG’s head of Southeast Asia in Singapore. “That’s true in our firm, that’s true across the various activities we’re seeing.”
The proportion of investors in private-equity funds that are considering putting money into emerging markets rose to about 72 percent in June, from 67 percent in December, according to a survey by London-based researcher Preqin Ltd. About 56 percent said Asia presented the best investment opportunities among emerging markets, while 37 percent named China and 25 percent picked India, according to Preqin’s quarterly report published in July.
The “greater emerging market stories in the next decade” will be Turkey, Brazil, Indonesia, Vietnam and Eastern Europe, Shastry said yesterday at a private-equity conference organized by Singapore Management University.
“If you are talking about China and India today, you are about 15 years too late,” Shastry said. “We always oversimplify and talk about the two big countries.”
TPG invested about $1.1 billion in Southeast Asia from 2005 to 2009, accounting for about 30 percent of the capital that the Fort Worth, Texas-based firm spent on the whole of Asia, Shastry said.
“Our returns have been good,” he said, without providing details.
The firm agreed in March to sell its 24 percent stake in Singapore-based Parkway Holdings Ltd., Asia’s biggest hospital operator, for S$959 million ($739 million).
TPG, run by billionaire David Bonderman, plans to put more money in Bank Tabungan, which opened about 550 branches in 18 months as it expanded into micro-lending, Shastry said. The Indonesian bank was originally a lender to retired civil servants.
“This is a business that’s all about growth,” he said. “We’re going to have to put more money in because the bank has run out of capital, they’re growing so fast.”
Bank Tabungan shares rose to a record yesterday after it said on Oct. 26 it plans to raise 1.32 trillion rupiah ($148 million) in a December rights offer to boost capital and expand lending.
“The most interesting investment themes in the emerging markets will focus on consumption and natural resources,” Shastry said.
TPG and BankInvest, a Danish investment fund, bought a $50 million stake a year ago in Masan Group Corp., a Vietnamese food and financial services company.
Masan said yesterday net profit in the first nine months almost tripled to 573 billion dong ($29 million). The stock has gained 64 percent this year, compared with a 9 percent decline in Vietnam’s benchmark VN Index.
London-based CVC Capital Partners Ltd.’s 7.2 trillion rupiah acquisition of the retail unit of Indonesia’s PT Matahari Putra Prima was the biggest private-equity transaction in Asia in the first half of the year, according to the Center for Asia Private Equity Research in Hong Kong.
The renewed focus on private-equity deals in emerging markets is here to stay because of their “deeper pool of labor,” savings and natural resources, Shastry said.
“This a secular trend, not a cyclical trend,” he said.
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