Affinity prepares for push into Indonesia

Hong Kong-headquartered Affinity Equity Partners is poised to open its first Indonesian office. The buyout firm will set up in Jakarta by November, KY Tang, chairman and managing partner of Affinity Equity Partners, told PEI Asia.

Affinity hired Inghie Kwik from Morgan Stanley last month to head its push into the Indonesian market, where it has yet to make any investments. Kwik, who has been appointed president and director of the firm’s Indonesian operations, was formerly the president of PT Morgan Stanley Asia, the US bank’s unit in Indonesia.

Indonesia, Southeast Asia’s largest economy, is increasingly becoming an appealing investment destination for private equity firms. With a population of over 235 million and healthy real GDP growth rate over the last decade, it presents some compelling investment opportunities in sectors such as financial services and telecommunications. The country is also natural resource-rich, giving rise to its own set of related investment opportunities.

Jakarta: a new home for Affinity

There are only a handful of private equity firms operating in Indonesia presently. These include Quvat Management, Saratoga Capital and TPG-affiliate Northstar Pacific Partners.

Affinity is focused on leveraged buyouts and control-investments, but also considers minority investments on a selective basis. Earlier this year, the firm was involved in the largest private equity buyout in Asia this year: the acquisition of Korea’s Oriental Brewery along with KKR for a consideration of about $1.8 billion. The firm was also awarded ‘Asian LBO Firm of the Year’ in this year’s PEI global private equity industry awards.

Affinity currently manages funds worth about $4 billion. With $3.5 billion of capital raised over the past five years, the firm ranked seventh in the PEI Asia 30, PEI Asia’s first annual ranking of the 30 largest private equity firms in Asia Pacific and the Middle East, which was released in June. The PEI Asia 30 is calculated based on the amount of private equity direct investment capital raised or created over the five preceding years.

Thus far, Affinity has invested in Australia, China, Hong Kong, Korea, Singapore and Thailand. The firm has offices in Singapore, Seoul, and Sydney.