KUALA LUMPUR • CIMB Group Holdings chairman Nazir Razak, who is a brother of Malaysian Prime Minister Najib Razak, is helping to start a regional private equity fund that will seek as much as US$1 billion (S$1.36 billion), people with knowledge of the matter said.
Datuk Seri Nazir will keep his role at CIMB, Malaysia's second-largest bank, while acting as one of the fund's five partners, according to the people. He will be joined by Mr Kenny Kim, who previously worked under Mr Nazir as chief financial officer of CIMB, the people said, asking not to be identified because the information is private.
Mr David Heng, who recently resigned as a senior managing director at Temasek Holdings, will also help direct investments at the new fund, the people said.
The fund, which is not connected to CIMB, will be based in Singapore, according to one of the people. It plans to target investments in the consumer, technology, logistics and financial services industries in South-east Asia, the person said.
Private equity deals in South-east Asia have more than doubled to US$37.4 billion this year, from US$16.4 billion during the same period last year, according to data compiled by Bloomberg.
An investor group agreed in July to pay US$11.6 billion for Singapore warehouse operator Global Logistic Properties in Asia's biggest-ever buyout, the data shows.
"Nazir is well-respected and has a good team with him," Mr Danny Wong Teck Meng, chief executive officer of fund manager Areca Capital, said yesterday.
"Their local connections and understanding of the South-east Asian business culture will give them an edge over other foreign funds. There are also better opportunities in this part of the world than elsewhere."
Mr Gita Irawan Wirjawan, who was Indonesian trade minister under the country's last president, and former Philippine finance secretary Cesar Purisima will also be partners at the new fund, the people said.
The five partners are planning to seek about US$700 million to US$1 billion from investors, according to one of the people.
Deliberations are at an early stage and details could change, the people said. A spokesman for CIMB declined to comment.
A representative for Temasek said Mr Heng will be leaving the Singapore state investment company at the end of this year to pursue other opportunities.
Mr Nazir, 50, and the other four partners either said that they have no comment or could not be reached for comment.
South-east Asia has emerged as a strong manufacturing alternative to China, helped by lower labour costs, growing domestic demand and improvements in infrastructure.
Gross domestic product in Asean surged to US$2.6 trillion last year, about the size of the United Kingdom's economy, from a mere US$37.6 billion in 1970.
Growth in Asean is seen at 4.9 per cent next year, with Myanmar, Vietnam and the Philippines posting the fastest expansions in the region, according to BMI Research.
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