News & Analysis

Aureos to set up shop in Singapore

The emerging markets specialist plans to raise new funds for China and India early next year and intends to make Singapore the hub for its activities in the region.

By
Yvette Choo
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Aureos Capital is planning to open a new Asian regional hub office in Singapore, Sivendran Vettivetpillai, Aureos’ chief executive, said in a statement. “No final decisions have yet been made on the full range of its functions,” he added. 
 
The UK-based firm intends to raise new funds of approximately $1 billion as part of its rapid expansion in Asia. “It is very important that we have a powerful office there, which can be the focus of our key activities in the region. This is the fundamental driver for our plans,” Vettivetpillai stated, noting that Aureos Advisers, Aureos' advisory company, will retain a significant presence in London as the majority of the firm's investors are based in Europe. 

He and four senior executives plan to move to Singapore this year, Vettivetpillai told the Financial Times two days earlier, citing the high cost of operations, rising taxes and more restrictive regulations in the UK as reasons behind the move.

The firm will hire at least five investment professionals in Singapore over the following six months, adding an additional five in the future, Vettivetpillai told Bloomberg.

The firm plans to raise new funds for India and China early next year, according to a source close to the firm. “If Aureos is able to raise $1 billion for Asia, that would represent roughly 50 percent of its total assets as the firm is currently managing $1.2 billion across all its funds,” the source added.

Currently, Aureos is targeting commitments of $250 million for Aureos Southeast Asia Fund II, more than double the size of its $86 million predecessor. The fund aims to see a first close by June 2010.

Separately, Aureos has invested $3.4 million for a significant minority stake of between 20 percent and 40 percent in Chinese water treatment company Shanghai Fucheng Environmental Protection Engineering Company (SHFC).

The investment is the fourth made from the Aureos China Fund, which closed on $36.5 million in 2006. Thus far, the fund has invested approximately 50 percent of its investible amount, Steve Wu, Aureos China Fund’s managing partner, told PEI Asia. The capital will be used to finance SHFC’s expansion into new service lines and geographical areas, he said.

SHFC designs and manufactures water treatment facilities. It offers installation, operation and maintenance services to buildings including office buildings and hotels in Shanghai. 

Aureos manages 16 regional private equity funds focused on Asia, Africa and Latin America. In Asia, the firm has offices in China, India, Indonesia, Brunei, Sri Lanka, the Philippines, Malaysia, Thailand, Vietnam and Australia.