DARAWATI Hussain, the attractive and unassuming chief executive officer of CIMB Private Equity is on the lookout for more acquisitions. Having made nine divestments over the last two years, 2012 will be a busy period of studying and evaluating new opportunities. The CIMB PE fund size has grown to some RM900mil from RM100mil when it started in 2001.
“Generally, for CIMB's stable of PE funds, sectors that continue to interest us are oil and gas support services, healthcare, consumer/retail themes, financial/business sectors and infrastructure.
“We will review investment opportunities in UK and Europe that have arisen due to the eurozone debt pressures,” says Darawati.
“We like sectors that benefit from fundamental macroeconomic factors, as well as demographic shifts. With rising incomes throughout the Asean region we like consumer and retail related investment opportunities. Regionally, through the integration of the local economies, we are starting to see increased opportunities for increased trade and travel, but also integration plays in healthcare and financial services or business services for that matter,” she says.
Darawati feels that to have a vibrant PE industry in Malaysia means having a large number of active venture capitalist (VC) and PE firms operating to fund investment opportunities in the market.
“It is irrelevant if these firms are based in Malaysia or elsewhere. However, the foreign firms do focus on much larger deal sizes (US$20mil to US$30mil) and in Malaysia the majority of deals are in the range of RM5mil to RM15mil,” she says.
She says that more significant growth in VC and PE will be seen when there is increased availability of funds to manage via outsourced programme from either government agencies and/or private domestic fund institutions.
Darawati opines that Malaysian fund institutions and corporates should play a more active role in encouraging the development of a more robust VC/PE industry either through initiating a concerted effort to develop exposure to the local firms.
“They could also partner local technology companies in developing Intellectual Property and having an active M&A policy for conglomerates to provide exit strategy options for VC/PE firms,” says Darawati.
Generally, Darawati is beginning to see a trend which seems to currently favour local Asian based private equity shops. She notes that local Asian teams have had a much higher success investing in Asia than global peers, and the trend currently is for local Asian based private equity firms to raise more capital, more quickly.
“We also are seeing that some global private equity teams have struggled to make these same inroads both on the deal side as well as the fund raising side for their Asian based teams. Our sense is that investors investing in Asian markets want to invest alongside a local partner that knows these markets and has deeper insights into local corporations, policies and regulators,” concludes Darawati. - By Tee Lin Say
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