A private equity firm owned by South Africa''''s Standard Bank and Malaysia''''s CIMB, which hopes to double assets to over $1 billion by early 2011 by launching a new Southeast Asia fund and growing its existing Islamic fund, is looking at investment in a port and wind farm in Pakistan.
Johan Bastin, Singapore-based CEO of CIMB Standard Strategic Assets Advisors, said the firm plans to launch a $300 million Southeast Asia infrastructure fund next year and increase its Islamic infrastructure fund to the target size of $500 million.
"We are already putting people in place," Bastin told Reuters in an interview, saying CIMB Standard has already recruited staff for an office in Indonesia that will open next month and a Turkey office that will cover central Asia. The number of professional staff in the firm have risen to 18 now from 11 mid-year, he said.
"How we market ourselves is that we are Asia but not China and India. A lot of LPs (investors) are overextended in China and India and we see ourselves as a nice complement to their existing portfolios." CIMB Standard, set up in 2006, has gone on an expansion path this year, clinching the management of an Islamic infrastructure fund backed by the Asian Development Bank (ADB) and Islamic Development Bank (IDB) in July, and buying over a former Babcock & Brown fund in September that owns a toll road in Thailand.
The Islamic fund has raised about $262 million to date and has a target size of $500 million, Bastin said. CIMB Standard, which has offices in Singapore, Malaysia and Thailand, currently manages about $490 million in assets, including a $150 million Southeast Asia infrastructure fund.
''''RISK MITIGATION'''' Bastin said the Islamic fund''''s target net internal rate of return is around 15 percent, while the Southeast Asia fund''''s IRR target is in the high teens. CIMB Standard''''s existing Southeast Asia fund is more than two-thirds invested and its assets include infrastructure projects as well as a stake in the International Medical University in Malaysia.
Bastin said the Islamic fund would invest in Muslim countries across Asia with the primary focus on countries such as Malaysia, Indonesia, Pakistan and Kazakhstan. "The presence of IDB and ADB gives the fund a certain political risk mitigation capability," he said when asked about the dangers of investing in countries like Pakistan where CIMB Standard is looking at an investment in a port and wind farm.
"Unless you believe that Pakistan is unmanageable, this is a good time for investment," he said. In Bangladesh, the firm is in talks to invest in a private university that wants to expand. Bastin said there was potential for investing in renewable energy across the region, following a trend that has started in the West. "I see this taking off in Southeast Asia and we want to have first-mover advantage."
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