Yawadwipa targets $750m buyout of Indonesia’s Bank Mutiara

In its communication to Mutiara's financial advisors, Yawadwipa said it was willing to partner with a "well-capitalized institution" or on a standalone basis.

The approach, though ambitious, fits in with Yawadwipa's aim to develop a multi-faceted financing platform based on a network of local partnerships. Chad Holm, who worked on M&A deals across the region with Bank of America Merrill Lynch before setting up Yawadwipa, wants to offer asset management and advisory services to local businesses in addition to making private equity investments.

Speaking to AVCJ in January, Holm pinpointed infrastructure, an area in which the government recognizes there is a need for investment, as the natural sweet spot. However, he refused to rule out investments in the financial services sector. "I have a background in financial services," Holm said. "When you are building a financial services platform you are going to find other businesses that have a natural synergy."

Yawadwipa noted that the Mutiara platform, while attractive, faces short-term difficulties due to global headwinds and slower asset recovery rates, with profits expected to fall 62% this year. It also singled out BCA, which was bought from the Indonesian government by Farallon Capital and local partner Djarum Group, as an example of how private equity can turn around financial institutions.

Nevertheless, the Indonesian government is considering reducing the current 99% cap on foreign ownership of local banks to 50% or less. With loan growth of 20% a year and further consolidation expected in the sector, regulators are concerned that ownership could spiral out of control. Temasek currently owns a 67.4% stake in Bank Danamon, Indonesia's sixth-largest lender, while TPG has a 59.7% interest in BTPN.

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• Topics
• Financials
• Buyouts
• Southeast Asia
• Yawadwipa
• buyout
• Financial Services
• Indonesia
• regulation