Carlyle hires UBS banker to open Indonesia office – report
The Carlyle Group plans to become the first global buyout firm to open an Indonesia office and has hired a banker from UBS to lead its efforts in a country that has so proved difficult to navigate for many larger PE players. Carlyle completed its first investment in Indonesia last year after several years of thwarted efforts.
According to Reuters, Rajiv Louis, who has a decade of M&A experience in Indonesia, will serve as country head. His past deals include advising on Carlyle's acquisition of a minority stake in telecom towers operator Solusi Tunas Pratama (STP) for $100 million last autumn. Louis previously served as UBS' country head for Indonesia an head of its local investment banking business.
Carlyle, which has raised more than $1 billion for its fourth regional buyout fund with a final target of $3.5 billion, has struggled to source deals in Southeast Asia, particularly Indonesia. The private equity firm has four investment professionals based out of Singapore - supported by staff based in other offices in Asia - and lost Anand Balasubrahmanyan, a senior managing director, earlier this year.
Industry sources have identified at least three Indonesia deals that Carlyle targeted but failed to land before finally securing STP. These include mining services contractor Buma Resources and cable TV operator LinkNet, which ultimately went to Northstar Pacific Partners and CVC Capital Partners, respectively. The firm was also close to securing a 25% stake in GarudaFood in 2011 but the deal floundered, with Suntory stepping in to do a joint venture instead.
As Southeast Asia's largest market and boasting favorable demographics and rising domestic consumption, Indonesia is one of the reasons global buyout firms are scaling up their presence in Singapore as a regional hub. LPs have observed that Indonesia offices are likely to follow as these firms have to demonstrate a commitment to a country in which they are so keen to invest.
Despite the enthusiasm, large-cap deals are difficult to come by and the track record of buyout funds is mixed. While TPG Capital and CVC have managed to execute significant transactions, the former through an alliance with local Northstar, others have found it more difficult.
Affinity Equity Partners was the first of the pan-regional firms to set up a Jakarta office but it took three years to complete its first deal in the country, acquiring a minority stake in auto services group Mitra Pinasthika Majesty (MPM) last year for about $100 million.
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