Northstar reaches $500m first close on Southeast Asia fund

A final close at the hard cap of $1 billion is expected no later than December, according to sources familiar with the situation. The drawdown for the first investment will also come later this year. Northstar declined to comment on fundraising.

The private equity firm, which is headquartered in Singapore but primarily invests in Indonesia, raised $820 million for its third fund in 2011. Initial projections put Fund IV at roughly the same size as its predecessor but the hard cap was subsequently increased to $1 billion in response to strong LP interest.

Northstar was founded by former Goldman Sachs banker Patrick Walujo and Glenn Sugita in 2003. The firm raised $110 million for its first fund and followed up with a second vehicle worth $285 million in 2008. Early investments included Bank Tabungan Pensiunan Nasional (BTPN), from which Northstar, TPG Capital and their co-investors secured a partial exit last year as Sumitomo Mitsui Banking Corporation (SMBC) agreed to buy up to 40% of the lender for $1.56 billion.

Although Fund III was nearly three times the size of Fund II, Walujo told AVCJ in 2012 that he didn't expect much change in investment strategy. Rather, the co-investment share would be scaled back. Northstar has invested over $2 billion, of which only around $700 million has come from the funds.

TPG has been a frequent co-investor with Northstar, having supported the early funds as an LP. The two firms took their relationship one step further in 2011 as TPG acquired a minority stake in Northstar, which in turn received a smaller interest in TPG. As part of the arrangement, Ashish Shastry moved from TPG to Northstar as managing partner.

One LP that has backed Northstar told AVCJ that Funds I and II were on course to deliver returns of around 3x and 2x, respectively. The LP added that it was too early to pass judgment on Fund III.

Northstar's approach has evolved in terms of the sector focus. While banking and mining services featured strongly in the earlier funds, the PE firm now pursues more complex companies in areas such as telecom infrastructure and credit card processing - an evolution that reflects that in Indonesia's wider economy. However, consumer and retail remain key areas of interest.

Northstar has also broadened its geographic focus, with Fund III including investments in banks in Thailand and the Philippines, as well as property broker ERA and Nera Telecommunications, both Singapore-based companies. The PE firm subsequently acquired the regional master franchise for ERA.

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• Topics
• Fundraising
• Southeast Asia
• GPs
• Northstar Group
• Southeast Asia
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• Indonesia
• GPs