CIMB Standard aims to manage over US$1b funds by 2011

Written by Yong Yen Nie
Monday, 28 September 2009 11:56

KUALA LUMPUR: CIMB Standard Strategic Assets Advisors Pte Ltd is targeting to advise and manage over US$1 billion (RM3.46 billion) by 2011, as the private equity (PE) fund adviser seeks more opportunities to acquire stakes in funds and investment deals in the region.

Fresh from the completion of an acquisition, via one of its funds, of a stake in Thailand-based Babcock & Brown Asia Infrastructure Fund (BBAIF) recently, CIMB Standard CEO Johan Bastin said it was stepping up its expansion in Southeast Asia.

CIMB Standard, established in 2006, is a joint venture between CIMB Group Holdings Bhd and South Africa-based Standard Bank. CIMB Standard’s South East Asia Strategic Assets Fund LP (SEASAF) recently acquired Babcock & Brown’s stake in BBAIF.

Singapore-based Bastin said CIMB Standard was on track to reach the target via existing and soon-to-be- launched funds, and expected to manage US$600 million to US$700 million worth of funds by the end of 2010.

“In preparation for our expansion plans, we are recruiting up to 22 professional investment officers by the end of this year, to be based in our main offices in Singapore and Kuala Lumpur, making CIMB Standard a medium-sized fund manager,” he told The Edge Financial Daily in an interview recently.

He said Babcock & Brown’s decision to divest its stake in the BBAIF presented an opportunity for CIMB Standard to invest in Thailand’s infrastructure projects, given that SEASAF has broad investment mandates in the infrastructure sector, including the power and renewable energy sectors.

“We want to profile ourselves in renewable energy and we hope to catch the first wave of it when it comes to Southeast Asia, as we have seen the wave coming to countries like China, Korea and Japan,” said Bastin, who has 12 years of experience in the renewable energy industry.

Currently, CIMB Standard invests primarily in the infrastructure and energy sectors via its US$150 million PE fund SEASAF. It plans to launch SEASAF’s successive fund, known as SEASAF II, in mid-2010 with a target fund size of US$300 million focusing on Southeast Asian investments.

CIMB Standard is also looking at setting up a renewable energy fund by end-2010 with an initial targeted fund size of US$250 million. The fund would have wider geographic reach in terms of investment opportunities, including those in China and India, Bastin said.

“We see ourselves as a middle-market fund. We don’t look at mega projects. In that sense, we are a niche player but we are also proactive in looking at deals,” he said.

CIMB Standard also has a syariah-compliant fund, Islamic Infrastructure Fund (IIF), with an initial closing fund size of US$262 million co-sponsored by the Asian Development Bank and Islamic Development Bank.

“Our assets have been performing rather well despite the global financial crisis. After three and a half years, we still have one-third of our investment capacity left and we expect to deploy the funds between now and middle of next year,” he said.

Bastin said the fund’s investors were mainly institutions and pension funds, as well as Standard Bank and CIMB Group — a vote of confidence in CIMB Standard as an asset manager.

“There are a lot of funds in Asia from the US and Europe fund managers. But the capital is centred in China, India and East Asia such as Japan, Korea and Taiwan. We are in a unique position as we are invested predominantly in Southeast Asia, and we are based in Asia. That is our strong proposition,” he said.

Bastin said while the challenge of investing in Southeast Asia would be its diverse economies and jurisdictions, they presented opportunities in risk diversification.

He said so far, CIMB Standard had given respectable returns to its investors, and believed the funds would give targeted 25% returns with the launch of SEASAF II and 15% net returns from IIF.

He added that given that IIF had a more refined investment strategy, it would focus on syariah-compliant infrastructure deals, and was looking at deals in Central Asia.

“Prudently, we do not go into the industries that we are unfamiliar with. Infrastructure is the fastest-growing PE fund and IIF could be the largest Islamic infrastructure fund in the world,” he said.

In Malaysia, CIMB Standard had invested in several toll road projects, as well as private healthcare education such as the International Medical University (IMU), Bastin said.

He added that CIMB Standard planned to open an office in Jakarta later this year and another in Istanbul to oversee its Central Asia operations next year. Currently, it has offices in Singapore, Kuala Lumpur and Bangkok.


This article appeared in The Edge Financial Daily, September 28, 2009.