Malaysia-headquartered private equity firm Creador, which is hitting the road to raise up to $650 million for its fifth vehicle, is also preparing its exit pipeline for 2021, according to its founder and chief executive officer Brahmal Vasudevan.
Creador, which has closed two big vehicles in the last five years, is targeting to divest stakes from its over five-year-old investments in Malaysian credit reporting agency CTOS Holdings and Indonesian lender Bank Index.
“We have the CTOS IPO coming up in Malaysia around July. We have appointed investment banks and are currently working out details,” he said, declining to elaborate further.
Malaysian credit reporting agency CTOS, which has roped in RHB Investment Bank, Maybank Investment Bank and Credit Suisse as advisors, is reportedly seeking to raise about $150 million in its IPO.
Creador acquired a 70% stake in CTOS Holdings for RM215 million back in September 2014 through its second fund. The PE player currently owns an 80% stake in CTOS and is looking to sell at least a 25% stake, DealStreetAsia reported in August last year.
Creador is also looking to exit its nearly six-year-old investment in the Indonesian lender Bank Index. “We are also exiting Bank Index,” Vasudevan said. He said Creador plans to sell its stake back to the [promoter] family.
Creador had, through its second fund, invested Rp290 billion for a 20% stake in Bank Index, which operates over 40 branches in Indonesia’s tier 1 and 2 cities.
Bank Index is majority-owned by the Setiawan family, whose business interests range from financial services, sugar and flour refinery and property, according to information from the website of Singapore-based SBI Venture Capital, another shareholder of the bank. As of September 2019, Bank Index’s loans and deposit portfolio stood at $490 million and $505 million respectively.
Creador scored a partial exit in October last year through the listing of its retail portfolio Mr D.I.Y. Group that raised RM1.5 billion ($370 million) in Malaysia’s biggest IPO in the last three years.
The PE firm is also said to have exited its investment in Indonesia’s Cimory Group, a protein-based packaged food and beverage manufacturer, DealStreetAsia reported in February 2020.
In January this year, Creador also completed its exit from Indonesian credit provider BFI Finance. It sold most of its interest in the portfolio firm back in 2018.
Creador to tap existing LP base
For its upcoming fifth fund that Creador plans to launch in March, the firm plans to focus on roping in its existing LP base to meet the target.
“We’re going to focus mainly on our existing LP, making sure that their demands are satisfied. We have been approached by several new investors. But it’s something we have to manage and see if we can cope,” he said.
The proposed fund is larger than its previous fund, which closed in July 2019 at $565 million, exceeding the target of $550 million.
Creador is targeting a first close for the fifth vehicle in July. Creador’s previous fund is expected to be 80% deployed by April-May, Vasudevan said. “We are about 60% invested,” he added.
The firm’s investments from Creador IV include Mr DIY Philippines, India-based value-added distributor iValue InfoSolutions, Mr DIY India, India’s Kogta Financial, Malaysian e-payment system operator GHL Systems and Shriji Polymers.
Founded in 2011 by Vasudevan, a former general partner and managing director of India-based PE firm ChrysCapital, Creador has about $1.5 billion in assets under management.
The private equity firm raised its first $130-million vehicle in 2013 followed by a $331-million second fund backed by Hamilton Lane, Siguler Guff, and Quilvest, as well as a Malaysian pension fund and a US-based endowment fund. It raised $415 million for its third fund in 2017.
Allaying concerns that it could be challenging to raise bigger funds especially with the ongoing pandemic-induced travel curbs and cautious investment sentiments, Vasudevan said Creador has started talking to LPs and the feedback has been positive.
“Investors care about good returns and realisations. If you meet both of these, they will be happy. We’re just talking to people. I think they are generally very happy with the [previous] results,” he shared.
On targeted return for the fifth fund, Vasudevan said, Creador “typically targets 25% return per annum”.
Thailand in focus
While the broad strategy for the fifth fund will be similar to the predecessors, Creador may scout for more deal opportunities in Thailand.
“The geographic focus is going to be the same. We cover India, Indonesia, Malaysia, Vietnam and the Philippines. We may see a little more [investment] in Thailand this time. We are exploring the market,” Vasudevan said.
Creador is focused on growth capital investments across consumer sectors, financial services to payment systems, among others.
Its portfolio companies include Indonesia-based snack brand Simba Indosnack Makmur and BFI Finance; Malaysian fashion brand Bonia Group; and, Paras Healthcare and Ujjivan Financial Services from India, among others.
Among its most recent investments, Creador last year invested $33.7 million in Indian packaging solution provider Shriji Polymers (India) Limited through its affiliate Sundara (Mauritius) Limited.