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Malaysia’s CIMB chairman in talks to start $1 bln regional fund: Reuters

Malaysia’s CIMB Group Holdings Bhd Chairman Nazir Razak, along with four prominent Southeast Asian business leaders, plan to start a regional private equity fund that will look to raise up to $1 billion, two people aware of the discussions said on Friday.

Former Indonesian trade minister Gita Irawan Wirjawan and former Philippines finance secretary Cesar Purisima will also be part of the project, the people told Reuters. A formal launch of the fund is likely after a few more months as the details are still being finalised, they said.

David Heng, outgoing senior managing director at Temasek Holdings (Private) Ltd and Kenny Kim, a former CIMB chief financial officer, will also be part of the team, the people said.

Nazir will continue in his role as CIMB chairman, the people said.

The fund will eventually look to raise $700 million to $1 billion. It will target investments in financial services industry and technology, one of the people said.

The people declined to be identified as the discussions were private.

Nazir and CIMB declined to comment. Temasek confirmed that Heng was leaving the state-owned investment firm at the end of the year to pursue new opportunities. Kim, Wirjawan and Purisima could not be immediately reached for a comment.

Southeast Asia has steadily drawn private equity investor interest, as businesses look beyond bank financing and initial public offering markets for funding.

Within Asia-Pacific, EY said in a report that private equity deal activity has remained skewed toward emerging Asia.

The tax and transaction advisory firm said in a report based on second-quarter earnings performance that “economies in Asean countries, China and India have been able to generate decent returns of around 5 percent for the investors, primarily due to the long-term investment theme around the rising middle class.”