rabbaddal
Oct 29, 2004, 11:25 AM
More access to equity capital for Pinoy entrepreneurs. One investment professional I spoke with said that a favorite target for private equity investments in the Philippines would be those lending investor enterprises, some of which supposedly generate up to 30+% returs year-to-year. This fund has specified its target sectors, though.
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Plantersbank, foreign firm to launch $25-M venture capital for SMEs
By Ted P. Torres
The Philippine Star 10/29/2004
Planters Development Bank (PDB) and foreign firm Aureos Capital will launch a $25-million venture capital fund to be used to prop up small and medium enterprises (SMEs) in the Philippines.
PDB is a private development bank ranked among the top five leading thrift and savings bank in the Philippines and specializes in SME lending. Aureos Capital, on the other hand, is a foreign private equity fund management company with funding support from the Norwegian Investment Fund for Developing Countries (Norfund) and CDC Development Partners, a government institution for private sector investments.
Aureos Capital has, in fact, already established an $80-million capital equity fund for the Asean region, of which $20 million will go to the proposed Philippine fund.
Aureos Capital is an international manager of private equity funds, and a market-leading risk capital investor in emerging markets. It has over $300 million of committed capital focused mainly on SMEs.
It has over 50 fund investors including European developmental financial institutions, local financial institutions, international development banks and international private institutions.
Of the total $25-million SME venture fund, $5 million will come from the PDB and the balance representing the capital share of Aureos Capital.
The target sectors for the fund are SMEs that are export-oriented, local pharmaceuticals, customer contact centers, and graphic designing with information and communications technology (ICT). These, the fund proponents said, are SMEs with a good potential or already well-placed in the market but are in need for help or additional capital.
"It will go to the sector that could really make use of the fund. It is not a loan but an equity fund, and we want to have more such funds in the future," PDB chairman and chief operating officer Jesus P.Tambunting said.
The fund will allow the bank to buy into an SME from a low of 25 percent to as high as 49-percent equity that would want to tap into the equity fund. Equity values will range from $400,000 to $1.5 million.
The bank would want to have a significant equity exposure to ensure significant management participation but not too large as to become majority stakeholders. After all, it is not a buy-out but temporary equity capital infusion to allow the SME to get back into its feet and expand its full potentials.
PDB president and chief operating officer Ma. Flordelis F. Aguenza said that they would insist on an exit provision with the equity buy-in.
"The exit provision allows us to take significant equity control within a period of between three to five years, or enough time to ensure the expansion of the SME. Then, the exit mechanism allows us to either sell out to the existing majority stakeholders, or to any interested foreign or local investors," Aguenza said.
PDB has already established a pipeline for the prospective targets, which are generally good SMEs which are experiencing financial difficulties or need further equity infusion, but has strong potentials for growth.
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Plantersbank, foreign firm to launch $25-M venture capital for SMEs
By Ted P. Torres
The Philippine Star 10/29/2004
Planters Development Bank (PDB) and foreign firm Aureos Capital will launch a $25-million venture capital fund to be used to prop up small and medium enterprises (SMEs) in the Philippines.
PDB is a private development bank ranked among the top five leading thrift and savings bank in the Philippines and specializes in SME lending. Aureos Capital, on the other hand, is a foreign private equity fund management company with funding support from the Norwegian Investment Fund for Developing Countries (Norfund) and CDC Development Partners, a government institution for private sector investments.
Aureos Capital has, in fact, already established an $80-million capital equity fund for the Asean region, of which $20 million will go to the proposed Philippine fund.
Aureos Capital is an international manager of private equity funds, and a market-leading risk capital investor in emerging markets. It has over $300 million of committed capital focused mainly on SMEs.
It has over 50 fund investors including European developmental financial institutions, local financial institutions, international development banks and international private institutions.
Of the total $25-million SME venture fund, $5 million will come from the PDB and the balance representing the capital share of Aureos Capital.
The target sectors for the fund are SMEs that are export-oriented, local pharmaceuticals, customer contact centers, and graphic designing with information and communications technology (ICT). These, the fund proponents said, are SMEs with a good potential or already well-placed in the market but are in need for help or additional capital.
"It will go to the sector that could really make use of the fund. It is not a loan but an equity fund, and we want to have more such funds in the future," PDB chairman and chief operating officer Jesus P.Tambunting said.
The fund will allow the bank to buy into an SME from a low of 25 percent to as high as 49-percent equity that would want to tap into the equity fund. Equity values will range from $400,000 to $1.5 million.
The bank would want to have a significant equity exposure to ensure significant management participation but not too large as to become majority stakeholders. After all, it is not a buy-out but temporary equity capital infusion to allow the SME to get back into its feet and expand its full potentials.
PDB president and chief operating officer Ma. Flordelis F. Aguenza said that they would insist on an exit provision with the equity buy-in.
"The exit provision allows us to take significant equity control within a period of between three to five years, or enough time to ensure the expansion of the SME. Then, the exit mechanism allows us to either sell out to the existing majority stakeholders, or to any interested foreign or local investors," Aguenza said.
PDB has already established a pipeline for the prospective targets, which are generally good SMEs which are experiencing financial difficulties or need further equity infusion, but has strong potentials for growth.