British investment company 3i Group Plc is keen on buying a couple of energy companies in Southeast Asia, aiming at more than doubling its Asian investments in 2005, one of its Asia co-heads said on August.
Plenty of natural resources and improving political situation have boosted the prospect of future deals for private equity groups in Southeast Asia.
"In Southeast Asia, we're seeing one or two very interesting opportunities in the energy sector," Mark Thornton, 3i's managing director and Asia co-head told Reuters in an interview.
"Southeast Asia has a lot of natural resources. In the current climate, we are seeing increasing demand for energy and oil prices remain attractive," he said, adding that there was less competition in Southeast Asia than in North Asia, where a large number of funds are scouring for deals.
3I made its first investment in India by pumping $45.5 million into Indian sports and media company Nimbus Communications Ltd in early August, nearly matching its $50 million investments in Asia in the whole of 2004.
Now the private equity firm is looking at one or two deals each in India, China and South Korea, as well as several independent energy companies in Southeast Asia, Thornton said. 3i bought Pearl Energy Ltd in 2004, helping the oil explorer and producer make a debut on Singapore's stock exchange in April. The stock has more than doubled its listing price.
Two percent of the firm's $10 billion funds are invested in Asia and it plans to double its Asian staff to 16-17 by the end of this year, with the launch of new offices in Shanghai and Mumbai.
Thornton, who worked as an accountant at Arthur Andersen in London before joining the investment firm in 1995, helped manage 3i's successful exit from Vantec Corp, a former subsidiary of Nissan Motors in 2003.
Singapore-based Thornton said the firm was also actively looking at Indonesia for possible deals with energy or consumer-related companies, which were expected to benefit from its huge population and improving political situation.
Potential divestments by Singapore state investment agency Temasek Holdings, which invests in a range of industries across Asia, were likely to create other opportunities for private equity firms, he added. 3i's deals in Southeast Asia and India would be in a range of $20 million to $100 million each, but investments in Japan and South Korea could top this range.
Private equity firms in Asia, which increased their funds by 4 percent to $110.8 billion in the first half of 2005 from a year ago, are expected to grow further as firms such as J.P. Morgan Partners are in the process of raising billions of dollars.
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