Saratoga Capital expected to pursue IPO in 2013

It is unknown how large a stake in the business would be offered up to public market investors, or how much Saratoga is seeking to raise. Bloomberg previously reported that the offering could be worth more than $200 million.

Saratoga Group was set up by Edwin Soeryadjaya and Sandiaga Uno in 1998 and initially served as an informal vehicle to manage the founders' capital as well as funds raised from associates. Their landmark deal remains Adaro Energy. Saratoga paid about $50 million for a 51% stake in the coal producer company in 2001 and took it public seven years later, achieving a market capitalization of $3 billion.

Other early success stories included forestry player Sumalindo and telecom infrastructure provider Tower Bersama Group. Kay Mock, formerly of Government of Singapore Investment Corporation (GIC) joined as a founding partner in 2006 and Saratoga raised its second fund - though its first properly institutional vehicle - in 2009, reaching a final close of $152 million. Saratoga Asia III closed at $600 million last year.

This wouldn't be the first Saratoga Group subsidiary to go public. Provident Agro, a palm plantation operator jointly owned with Provident Capital Indonesia, raised IDR292.5 billion ($30 million) through its IPO last year.

However, it is unusual for a private equity firm of Saratoga's size to consider a public offering. The global buyout firms that have followed this route have generally sought to build larger and more diversified asset bases. The rationale is that consistent, fee-based revenue streams are more palatable to public market investors than potentially large but unpredictable carried interest income.

Once publicly traded - and provided there is sufficient liquidity - a private equity firm has the luxury of a permanent balance sheet outside of its funds. This allows a firm to participate as an LP in its own funds as well as seeding new business initiatives.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• GPs
• Southeast Asia
• Southeast Asia
• Indonesia
• Saratoga Capital Group
• IPO