12 Dec Bravia Launching PE Fund Targeting Pan-Asian Logistics Sector
Bravia Launching PE Fund Targeting Pan-Asian Logistics Sector
Bravia Capital may be launching its first institutional private equity fund, but the firm has made successful investments in the Pan-Asian transportation-related logistics sector since 2009.
The Hong Kong-based investment firm has exited two investments to-date with realized net profits of $800 million, a 1.9 times equity multiple within three years of initial investment ,and is now looking to build its first fund with a target size of $400 million.
The firm is led by founder Bharat Bhise and has currently raised $120 million in committed capital for the fund, including $20 million from the firm and $100 million from HNA Group, a Chinese aviation and shipping conglomerate that Bravia has worked with in a fund-like structure.
That relationship has included the building of some of the strongest transportation and logistics platforms in the world, Bhise said, including an investment in Hong Kong Aviation Capital that is now part of the fourth largest aircraft leasing business, and SeaCo, a container leasing company that was merged with Cronos Limited last year to create one of the largest container fleets in the world.
“We have built platforms and we have created value not just by the consolidation of assets but by the ability to have global world class, best-in-class platforms that are market leaders in profitably in the world,” Bhise said.
The firm is looking to capitalise on growth opportunities in a logistics sector underpinned by strong economic growth in the Asia-Pacific region. About $5.3 trillion of infrastructure spending is expected in the region by 2025, with logistics spending alone set to grow by 85 percent or $146 billion, according to a report by PricewaterhouseCoopers.
Bravia is not just an investor in these companies, as in the past Bhise has taken on the ceo role during management changes until a new team was put in place.
“All these businesses that we bought and sold, we built managment teams and Bravia has made its upside. Bravia is ready to put its own institutional private equity fund, but the money where its mouth is,” he said.
The fund is looking to make six to 10 investments in the $20 million to $80 million range in companies with enterprise values of $50 million to $200 million.
“There are a lot of companies in the smaller space that need to be made into $500 million companies,” he said, explaining that the focus is on mature businesses that are run by a patriarch or a group of individuals that has not expanded outside its geographical base, brought in management systems or used the right capital structures on their balance sheets.
The expectation is to start out the companies as separate entities, with a plan to build platforms.
The fund will consider China, India, Indonesia, Thailand and Vietnam and may also look at Malaysia, Singapore and Hong Kong as areas of investment.
The firm has a “robust pipeline” and has already invested in the first deal itself for the fund.
“We are targeting anything that is connected to the supply chain. It is pretty broad from that perspective,” he said.
Bhise said the strategy provides an infrastructure-like opportunity without the limited returns.
“If a U.S. investor knows and is comfortable with infrastructure, he should be comfortable with our strategy,” he said.
“All these business we bought and sold, We build management teams and bravia has made its upside. Bravia is ready to put its own money where its mouth is”
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