Affin Hwang enters private equity biz with Bintang Capital

By KEVIN WONG / Pic By MUHD AMIN NAHARUL

Affin Hwang Asset Management Bhd (Affin Hwang AM) has ventured into the private equity (PE) space with the launch of Bintang Capital Partners Bhd.

The move is primarily aimed to reduce the correlation of PE to other asset classes like equity and bonds.

Affin Hwang AM MD Teng Chee Wai said strong demand from its institutional and high net-worth clients led to the setting up of a PE business in 2015.

“We had to move quickly to establish a PE business with its own proprietary deal flow and a dedicated team in order for us to successfully capture this opportunity.

“The launch of Bintang marks the culmination of two years team effort to build the PE business, an initiative led by Johan Rozali-Wathooth who joined us as deputy MD in June 2016,” he noted in a statement.

Bintang intends to invest in fast-growing private companies, as well as to support entrepreneurs and their management teams in the Asia-Pacific region.

“Our partnership goes beyond financial investment. We help our investee companies build foundations to become regional or even global champions by deploying our expertise, resources and networks alongside our capital to provide our investee companies with true value creation,” Teng said.

Bintang will serve as the entrepreneurs as well as the management teams’ active partner to drive the value of creation process.

Bintang’s foray into the PE market began in June 2017 with the buyout of Bitsmedia Pte Ltd and the world’s leading Muslim lifestyle app, Muslim Pro.

Teng said the buyout of Bitsmedia was in conjunction with Bintang’s strategic partnership with CMIA Capital Partners Pte Ltd in Singapore.

Alongside Johan, Soon Poh Lean joins Bintang as a partner, while Theresa Lim and Andrew Tan will be Bintang’s investment director and VP respectively.

The trio were a core part of the regional merger and acquisition advisory team at RHB Investment Bank Bhd. The Securities Commission Malaysia (SC) has registered nine PE management as of May 31, 2018. Among them are CMS Opus Private Equity Sdn Bhd, DWA Private Equity Sdn Bhd, Kairous Capital Sdn Bhd, Maybank Private Equity Sdn Bhd, RMCP (Cayman) Ltd, Senturia Capital Sdn Bhd, Warisan Quantum Management Sdn Bhd, Widuri Capital Management Sdn Bhd, and Zulu Capital Sdn Bhd.

The SC has also registered two PE corporations, namely RMCP One Sdn Bhd and Alnedjma Capital Sdn Bhd as of May 31, 2018.

The region’s PE industry achieved its best all-around performance to date last year which signalled the start of a new era, according to Bain and Co’s Asia-Pacific PE Report 2018.

The report said Asia-Pacific PE deal value soared to US$159 billion (RM636 billion) in 2017, up 41% compared to 2016 and 19% higher than the previous all-time high of US$133 billion recorded in 2015.

Investments were more balanced geographically as Greater China still accounted for almost half, or 45%, of the region’s PE activity in 2017, while India, Japan and South-East Asia each accounted for more than 10%.

“Japan and South-East Asia saw the biggest gains last year where its investment deal value rose US$25 billion — up 269% from 2012 to 2016. South-East Asia’s value deal jumped to US$20 billion, an increase of 182% over the same five-year average,” it said.

The setting up of Bintang comes as CVC Capital Partners broadened its exposure to the fast-growing consumer industry in South-East Asia by acquiring Malaysian snack producer Munchy Food Industries Sdn Bhd.

The London-based investment firm’s Asia Fund IV completed the purchase of acquiring a 100% stake in Munchy Food on June 8 for about US$250 million.

Foreign investors have also expressed their believe that the economic growth in South-East Asia will fuel demand for higher-end consumer products.

According to the Asian Development Bank, the region’s economy increased by 5.2% in 2017 compared to 4.7% in 2016.