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| EmergingMarketsNOW |
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| Thursday, August 28, 2008 |
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SHUAA Capital Saudi Arabia Raises $240Mn in First Closure of Hospitality Fund
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SHUAA Capital Saudi Arabia, a subsidiary of SHUAA Capital (a Dubai-based investment bank), announced the first closure of its fund—SHUAA Saudi Hospitality Fund I—raising USD 240 million from regional, institutional, and individual investors. The company expects to raise USD 293.3 million by the second and final closing of the fund. The fund will be used for developing 17 hotel properties, furnished apartments, and resorts across the Kingdom of Saudi Arabia comprising 5,000 rooms. In addition, the fund will also acquire a 20 percent stake in a new hotel management company that will be incorporated in Saudi Arabia by UAE-based Rotana Hotel Management. The new company will operate and manage the fund’s hotel properties on an exclusive basis. The fund has formed a management team, and is currently in advanced discussions for seeking strategic land acquisition opportunities in Riyadh, Jeddah, Madinah, and Khobar.
Incorporated in 1979, SHUAA Capital offers services in the PE, asset management, investment banking, brokerage and advisory and investment research domains. The company has assets worth USD 2.7 billion under management. Earlier the company has raised a USD 200-million SHUAA Hospitality Fund I, which focuses on GCC, Egypt, the Levant, and other select MENA countries.
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Battery Ventures Expands Israel Office
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Battery Ventures, a US-based VC and PE firm, relocated Scott Tobin (General Partner) and David Sokolic (Senior Associate) from its US-based investment team to firm's Herzilya (Israel) office. They will assume their roles in the firm’s Israel office from the fall of 2008. The move is in line with the company’s plan of building a global investment platform. In addition to being a part of the company’s global investment team, Scott and David will be responsible for acquisition deals in in Israel, the Middle East, Europe, and the US.
Founded in 1983, Battery Ventures has USD 3 billion in capital under management and is currently investing from its USD 750 million BV VIII fund. It invests in cleantech, infrastructure, financial services, and semiconductors and components domains. The company has offices in Boston, Israel, and Silicon Valley. Earlier this year, company announced its plans to open an office in Mumbai by the end of 2008.
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Morgan Stanley Appoints Gautam Bhandari as Head of Infrastructure Team
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Morgan Stanley Infrastructure Partners appointed Gautam Bhandari, to lead the bank’s infrastructure investments team for India, the Middle East, and Sub-Saharan Africa, as the bank is now preparing to invest USD 4 billion infrastructure fund closed in May. Apart from these regions, fund will also seek investments in Europe and the US. Gautam is gradually building a team, from both internal as well as from external hires, to work on a making a number of investments deals across various sectors. Prior to his appointment, Bhandari was based in New York, wherein he advised clients globally on M&A and financings in the engineering and construction, industrial services, and alternative energy sectors.
Morgan Stanley Infrastructure focuses on long-term investments for providing essential public goods and services across the globe. It has offices in North America, Europe, and Asia. The company has USD 577 billion assets under management.
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Sequoia Capital to Acquire 20% Stake in Cotton County Retail
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Sequoia Capital India, a leading PE firm, will acquire a 20 percent stake in Cotton County Retail, an India-based apparel maker and retailer, for USD 27.35 million. The funds will help Cotton County Retail increase the number of outlets from 400 to 1,000 by 2010. The move is in line with company’s plan of enhancing presence in the southern and western parts of India. With operations across 350 cities, the company employs a business model to sell products through franchisees, thus eliminating middlemen and agents.
With offices in the US, China, India, and Israel, Sequoia Capital invests in companies having high growth prospects. The company’s investment portfolio includes Cisco Systems, Oracle, and Apple.
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CITIC Capital in Talks with China’s NSSF to Launch $292-Mn PE fund
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CITIC Capital, a China-focused investment management and advisory firm, is in talks with China’s National Social Security Fund (NSSF) to raise a Yuan-denominated PE fund. According to the deal, NSSF and CITIC Group (the parent company of CITIC Capital) will invest a minimum of USD 146.2 million each in the fund. Additional money will also be raised from other investors including major state-owned enterprises. The fund will invest in state-owned enterprises and industrial sectors across China. The move is in line with NSSF’s plan of expanding PE business to earn high returns and diversify investments. CITIC Capital will manage the fund.
Founded in 2002, CITIC Capital invests in the PE, real estate, structured finance, asset management, and special situations domains. In 2007, the firm set up a China-focused USD 425-million PE fund, which has invested in Chinese companies including Harbin Pharmaceutical Group and Fushun Excavator. The company has assets worth USD1.6 billion under management. With a headcount of over 150, it has offices in Hong Kong, Shanghai, Beijing, Tokyo, and New York.
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KOP Capital Seeks to Acquire Stake in Stein Group
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Singaporean KOP Capital, owned by Dubai Group, will purchase a 50 percent stake in Stein Group, a European hotel chain, for USD 50 million. It will invest another USD 50 million on new hotels in Asia. Stein Group, which operates 15 small luxury hotels in European cities, including London and Monte Carlo, plans to acquire luxury hotels with up to 85 rooms in big Asian cities, such as Singapore, Beijing, Tokyo, and Hong Kong.
Dubai Group is one of the leading companies of Dubai Holding, focusing on the banking, investments, and insurance sectors in the domestic and international markets.
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3i Group to Invest $227Mn in Krishnapatnam Port
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3i Group is acquiring a stake of up to 26 percent in Krishnapatnam Port, one of India’s fastest growing seaports, for USD 182.3–227.9 million. The PE firm has filed for approval with the Foreign Investment Promotion Board (FIPB). Krishnapatnam Port is a developer and operator of an all-weather, deep-water port in southern Andhra Pradesh state. The investment would be the largest by a foreign PE in India’s port sector.
Earlier, the 3i Group raised USD 1.2 billion for its India Infrastructure Fund. The fund has invested USD 227 million in Adani Power and USD 101 million in an engineering and construction firm.
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| Private Equity and M&A Activity |
SHUAA Capital Saudi Arabia Raises $240Mn in First Closure of Hospitality Fund
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SHUAA Capital Saudi Arabia, a subsidiary of SHUAA Capital (a Dubai-based investment bank), announced the first closure of its fund—SHUAA Saudi Hospitality Fund I—raising USD 240 million from regional, institutional, and individual investors. The company expects to raise USD 293.3 million by the second and final closing of the fund. The fund will be used for developing 17 hotel properties, furnished apartments, and resorts across the Kingdom of Saudi Arabia comprising 5,000 rooms. In addition, the fund will also acquire a 20 percent stake in a new hotel management company that will be incorporated in Saudi Arabia by UAE-based Rotana Hotel Management. The new company will operate and manage the fund’s hotel properties on an exclusive basis. The fund has formed a management team, and is currently in advanced discussions for seeking strategic land acquisition opportunities in Riyadh, Jeddah, Madinah, and Khobar.
Incorporated in 1979, SHUAA Capital offers services in the PE, asset management, investment banking, brokerage and advisory and investment research domains. The company has assets worth USD 2.7 billion under management. Earlier the company has raised a USD 200-million SHUAA Hospitality Fund I, which focuses on GCC, Egypt, the Levant, and other select MENA countries.
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Supponor Receives $8.8Mn in Series A Funding
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Supponor, a Finland-based provider of digital billboard replacement (DBR) solutions for live sport broadcasts, raised USD 8.8 million in its first round of funding. The round was led by Northzone Ventures, Conor Venture Partners, and an existing investor in Supponor. Supponor will use the funds to launch DBRLive in Europe and the US. Also, partial amount will be used for selling and marketing Supponor DBRLive on a global scale.
Established in 1996, Northzone Ventures is a leading Nordic based VC firm focusing technology companies. Conor Venture Partners invests in early-stage companies across Finland, Sweden, and the Baltics. It operates in the information and communications technology, embedded software, semiconductor technology, electronics, new materials, and optics domains.
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| Offshoring and Outsourcing News |
BT Plans to Sell Tech Mahindra’s Stake
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British Telecom (BT) is reportedly planning to sell its 31 percent stake in Tech Mahindra; the move is in line with the company’s existing strategy. BT will reportedly sell either a major part or the entire 31 percent stake. The transaction is expected to be one of the largest in the Indian outsourcing segment. Bidders for the stake include domestic and overseas PE players finding it difficult to launch funds in India. Mahindra & Mahindra (an Indian business conglomerate) will not contend for the stake as it wants Tech Mahindra to continue to be listed.
Established in 1986, Tech Mahindra is a JV between BT and Mahindra & Mahindra. The company is a leading Indian software services provider for the telecom sector. The company’s clients include BT, AT&T, Alcatel, and Vodafone.
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ICICI, Investors Plan to Sell Firstsource Stake
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ICICI Bank, Aranda Investments, and Metavante are reportedly planning to sell their joint 68 percent stake in Firstsource. They are reportedly seeking USD 425.1 million (USD 1.5 per share). However, bidders plan to pay USD 1.3 for each share. WNS Holdings and Genpact are likely to bid for the stake.
In addition, the winning bidder will be offered a mandatory option to acquire a 20 percent stake through an open offer, which is expected to cost another USD 125.4 million; the final bidder is expected to be announced by end September 2008.
WNS will reportedly benefit from acquiring the stake as Firstsource is a diversified BPO services provider to high-growth verticals including healthcare, BFSI, and telecom. In addition, Firstsource has a presence in emerging economies including Latin America and South-East Asian countries.
Aranda Investments is a wholly-owned division of Singapore-based Temasek Holdings. Metavante Corporation is a US-based provider of financial technology services, software and financial services, regulatory advice, and consulting to its clients in the financial sector.
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TCS, SIA Cargo Sign 5-Yr Back-Office Contract; TCS Learning Center Established in Assam
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Tata Consultancy Services (TCS), an Indian IT services provider, has been selected by Singapore Airlines Cargo (SIA Cargo), a wholly-owned subsidiary of Singapore Airlines, for a five-year back-office accounting processes contract. The financial terms of the contract were not disclosed; it is speculated to be worth over USD 100 million. As per the contract, SIA Cargo will outsource cargo revenue accounting processes to TCS. In 2004, Singapore Airlines outsourced its core critical back-office revenue accounting processes to TCS.
In another development, TCS entered the North East India market by establishing TCS Learning Center at IIT campus in Guwahati, Assam. The facility, which is already operational, possesses the capability for training 200 professionals in a single session. It will be used for conducting the company’s Initial Learning Programme for fresh engineering graduates from the North East.
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Vodafone Qatar in talks with MEEZA
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Vodafone Qatar, the second mobile phone license holder in the country, has inked a Memorandum of Understanding (MoU) with MEEZA, a JV with the Qatar Foundation and provides IT solutions and outsourcing services in Qatar, to discuss a long term solutions agreement.
The two companies are discussing the terms of the agreement under which MEEZA would supply an end-to-end turn key infrastructure solution to support Vodafone's core telecom and network management operations. The solution will provide redundant GSM switching capability and a network operations center, in addition to provision of placement for Vodafone's microwave communications station located in MEEZA's Tier III Data Center at Qatar Science & Technology Park (QSTP).
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Vontobel Asset Management, RBC Dexia Sign Outsourcing Contract
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RBC Dexia Investor Services has been selected by Vontobel Asset Management for an outsourcing contract in Luxembourg. The duration and financial terms of the contract were not disclosed. The contract will strengthen RBC Dexia's position as a leading asset manager.
The contract entails RBC Dexia to deliver custody, fund administration, shareholder, and recordkeeping services for Vontobel Asset Management’s EUR 11-billion portfolio of Luxembourg-based funds. In 2007, Vontobel Asset Management outsourced back- and mid-office investment activities in New York to Northern Trust.
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