VIDEO: Creador's Brahmal Vasudevan

"Indonesia in many senses reminds me of India 8-9 years ago," Vasudevan tells AVCJ TV. "I'd been investing in India since 2000, well before it became favored by many funds, and you see many of the same challenges of investing in a market in its early stage."

Chief among these is a lack of familiarity with private equity. This means the range of investment opportunities is narrower, company management is more difficult to access, and it takes longer to execute transactions because entrepreneurs need to be educated on the purpose of private equity and the kinds of terms and conditions that come with investments.

"We are reverting back to our bottom-up approach as opposed to the intermediary approach," says Vasudevan. "We are meeting with a lot of companies, not necessarily with view to them raising money immediately but definitely in terms of cultivating that experience."

The nascent stage of development of the Indonesia market is a positive in that Creador sees relatively few rivals for the mid-market deals it typically pursues. Entrepreneurs have traditionally looked to debt financing, accepting relatively high interest rates on debt-based products due to wariness about sacrificing equity and the high growth many see in their businesses. Vasudevan expects attitudes to change over time, but he stresses the importance of a local presence in order to seize opportunities when they emerge.

"Our office here is led by Cyril Noerhadi, a senior managing director who has spent 48 years out of the 50 years of his life here," Vasudevan adds. "He is well known and well respected individual with great access to companies and people. That is absolutely critical. I don't think there is any other way of investing in a market like this."

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