Murray Johnstone Forms Three-Way Asian Partnership

As most of its peers look towards Continental Europe, Murray Johnstone Private Equity (MJPE) has opted instead to take the less trodden path into Asian markets. Murray Johnstone, which already has a well-established group office in Singapore has joined forces with GK Goh Holdings, one of the largest stockbrokers in South East Asia, and BancBoston Capital, the global private equity arm of BancBoston Corporation and a long-standing associate of MJPE in the UK, to form a new fund management group. Murray Goh Private Equity, which will target Asian middle market growth companies, has established a $22.5 million (ecu 20 million) closed-end fund, Asia Private Equity Growth Opportunities.

Murray Goh Private Equity (MGPE), is 51% owned by Murray Johnstone, 34% by GK Goh and 15% by a BancBoston Capital affiliate. Asia Private Equity Growth Opportunities was subscribed by Murray Johnstone clients, GK Goh and BancBoston Capital, and has not been actively marketed to third-party investors. It will be managed by Murray Goh Private Equity, which in turn is exclusively advised by Murray Johnstone Asia. BancBoston Capital and GK Goh are represented on the fund’s investment committee.

Asia Private Equity Growth Opportunities will invest throughout the ASEAN region, with a primary focus on Singapore, Malaysia, Indonesia, the Philippines and Thailand, and a secondary focus on Taiwan, China and India. Most of its investments, which will typically range from $1-5 million, will be expansion or acquisition capital deals, since there is not yet an active buyout market in the target region. Since all three partners are keen to co-invest alongside the fund, MGPE may also undertake substantially larger deals. The fund is aiming to acquire “significant shareholdings of between 15% and 70% in potentially high growth companies where MGPE sees viable exit opportunities within the fund’s life span. Peter Linthwaite, managing director of Murray Johnstone (Asia) expects Asia Private Equity Growth Opportunities to reach full investment within two to three years, at which point larger successor funds may be launched.

For MJPE, the formation of the MGPE joint venture is “a toe in the water” in the ASEAN private equity markets, according to managing director David McLellan. For BancBoston Capital, the partnership represents a further step into the ASEAN stream: the geographic focus of the Asia Private Equity Growth Opportunities fund will complement the exposure it has already built in the region through its links with Crosby and investment in The Greater Mekong Fund. BancBoston Capital currently has a team of three private equity executives, headed by Robin Higham, in Hong Kong. The link with MGPE is in line with the group’s strategy of maximising its effectiveness by forming strategic relationships to enhance its presence throughout Asia. London-based BBC managing director Andrew Kellett said that the group would bring “not only money, but access to competitive analysis and industry knowledge to the MGPE operation” and described its role as that of an active co-investor and co-sponsor.

BGK Goh’s network of contacts throughout the region, where it has offices in Singapore, Malaysia, Hong Kong, Indonesia and the Philippines, is expected to secure a strong deal flow for the fund, while the stockbrokerOs research expertise and experience of direct and fund investing worldwide will provide valuable support to the investment decision-making process. Peter Linthwaite commented that the three partners together “possess the complementary skills needed to make Murray Goh successful”. Robin Higham said the new operation was “a fantastic opportunity for us to leverage our combined strengths”.