Click here for printer friendly page

Asia, Australasia & the Middle East: May 2003

New fund to target post-Saddam Iraq, KLM launches China-focused fund and China's regulatory reforms offer some optimism…

Fund targets $100m for investment in Iraq
A Bahrain-based financial services company is launching a $100m private equity fund for investment in post-Saddam Iraq, rebuilding the nation's tourism trade, real estate, telecom services and oil and gas infrastructure. The fund will be managed by a firm named Amwal (‘money' in Arabic), which was founded two years ago by Yousef Al-Essa and Mohamed Sarhan. Amwal emerged from a business plan competition organised by Morgan Stanley. It is backed by high net worth individuals and institutional investors including TekBanc, the venture capital arm of the Kuwait Fund for Arab Economic Development, and the National Bank of Kuwait. The fund had already raised $50m and is expected to be fully invested in five to seven years.
Reuters 7.05.03

New regulations breed cautious optimism for China's private equity market
The majority of private equity and venture capital investors in Asia Pacific believe China offers the best investment opportunities in the region, according to PricewaterhouseCoopers' ‘Show us the Money' survey. But most will wait to see what impact China's recent regulatory overhaul has before setting up funds in the market. Regulations covering foreign participation in private equity funds were initially enacted in August 2001, but were revised in March this year. Private equity firms have welcomed the changes but do not expect their impact to be immediate. Of the surveyed respondents 60 per cent of private equity and venture capital investors considered China to be the most attractive market in Asia-Pacific. But 77 per cent indicated that they did not intend to start a fund in china in the near future.
AltAssets 16.05.03

ADB, SECO and UOB launch socially responsible fund
The Asian Development Bank is to invest in a new private equity fund with a focus on making investments in socially responsible SMEs in the People's Republic of China and the Association of Southeast Asian Nations. The ASEAN China Investment Fund, which is structured as a closed-end limited partnership with an eight-year term, plans to raise $125m via private placement. UOB Capital Partners will be the general partner. The State Secretariat of Economic Affairs of Switzerland and the United Overseas Bank Group are both thought to have committed capital to the fund.
AVCJ May 2003

KLM and Asian Investors form $50m Global Synertech fund
KLM Capital has joined forces with several Asian investors to form a $50m venture fund to invest in companies with a focus on China. The Global Synertech Fund will invest both in foreign companies with plans to move into China and Chinese enterprises looking to expand into a global market. Singapore-based business real estate firm Ascendas and Tsinghua Science Park Development Centre, the commercial arm of Beijing's Tsinghua University, are to form the Beijing-based fund alongside KLM. The three partners will jointly manage and make equity investments in both early and late-stage companies working in IT, materials, energy and environmental technologies. The fund will be operational by the end of this year.
VentureWire 9.05.03

Venture capital tax change a ‘priority'
Changes to New Zealand's tax rules on inbound venture capital are set for a dramatic change as the government looks into ways of ensuring that the industry does not get left behind that of its neighbour Australia. One issue to be addressed will be the creation of venture capital firms as limited partnership structures to ensure tax transparency for investors. At the moment the venture fund itself is a taxable entity. The government may also look at measures to provide a temporary exemption for migrants from tax on foreign incomes.
New Zealand Herald 17.5.03