Malaysian private equity firm CMS Opus Private Equity Sdn Bhd aims to increase its assets under management to MYR500 million ($133 million) from the current MYR300 million ($80 million) through investments in 16 more companies this year.
Managing director Azam Azman told Malaysian Reserve that the firm’s portfolio now includes eight companies involved in the manufacturing, services or retail sector space.
“The manufacturing companies tend to be of sole proprietorship and they have good assets,” he told local media at the sidelines of the 2015 Southeast Asia Venture Capital and Private Equity Conference earlier this week.
CMS Opus has a target of 10 per cent return on equity for its investments, with a 30 per cent investment return drawn so far, with the return on earnings (ROE) from its last exit standing at 2.5 times.
Commenting on exit startegies, Azam said PE firms look at a variety of exit options apart for the listing option.
“PE can do a trade sale or a share buy-back. There is no generalization to IPO. Usually when the economy slows down, the merger and acquisition activities pick up. That is the time for PE to cash-in on investments,” said Azam.
CMS Opus is the PE arm of Bursa Malaysia-listed Cahya Mata Sarawak Bhd. It has previously focused on the oil and gas sector, but DEALSTREETASIA reported in March that the firm has divested all its oil and gas related portfolio.
In January this year, the firm exited its 2011 investment in Trisystems Engineering Sdn Bhd, with a capital return of MYR22,212,688 ($6.2 million) representing an internal rate of return of 30.03 per cent and a money multiple return of 2.47 times.
CMS Opus acquired a 20 per cent stake in Trisystems in April 2011 for MYR9 million ($2.5 million), through its COPE-KPF Opportunities 1 fund.
Trisystems is leading in the field of process instrumentation and control, filtration and combustion in Malaysia. It also offers automation systems, process packages solutions and provides custom engineering design, assembly, testing, installation, commissioning, support and training primarily for the oil and gas industry. CMS Opus’ investment has benefited Trisystems in securing double digit growth over the span of the investment horizon.
In March this year, CMS Opus acquired a 30 per cent stake in utility and water related player Damini Corporation Sdn Bhd through its COPE Opportunities 2 fund. The proceeds from the investment will be utilised for merger and acquisitions and as growth capital.
The principal activity of Damini is supplying chemicals, reagents, equipment for water treatment, water meters, engineering services to the water distributors, chemical solvents and marine gas oil for the oil and gas industry.
Local media had reported that Damini plans to grow through acquisitions, supported by CMS Opus’ capital injection.
For the financial year 2014, CMS Opus returned investment capital amounted to MYR10.17 million.