Warburg Pincus sets up office in Singapore

Deputy Prime Minister Tharman Shanmugaratnam, who is also Coordinating Minister for Economic and Social Policies and Monetary Authority of Singapore chairman, with (from left) Warburg Pincus president Timothy Geithner, Mr Kaye and Mr Perlman at the f
Deputy Prime Minister Tharman Shanmugaratnam, who is also Coordinating Minister for Economic and Social Policies and Monetary Authority of Singapore chairman, with (from left) Warburg Pincus president Timothy Geithner, Mr Kaye and Mr Perlman at the firm's Singapore office opening ceremony yesterday. PHOTO: COURTESY OF WARBURG PINCUS

US private equity firm wants to tap S-E Asia's emerging middle class, rising urbanisation

American global private equity firm Warburg Pincus officially opened an office here yesterday as part of efforts to tap on growth in South-east Asia.

The region's young emerging middle class and rising urbanisation offer significant long-term investment opportunities, said co-chief executive officer Charles Kaye and South-east Asia head Jeffrey Perlman.

The firm is also seeking out companies in Singapore and the region with strong growth potential and aims to help them expand overseas, they said in an interview with The Straits Times yesterday.

Warburg Pincus opened its first Asian office in Hong Kong in 1994 and has since invested over US$10 billion (S$13.5 billion) in Asia.

It also has offices in Beijing, Shanghai and Mumbai.

The company has more than US$40 billion in assets under management worldwide, and has invested more than US$55 billion in more than 750 companies in over 40 countries.

The Singapore office was officially opened yesterday at an event attended by Deputy Prime Minister Tharman Shanmugaratnam.

Asia makes up about 35 per cent of Warburg Pincus' portfolio and the firm has been coming across more interesting opportunities in South-east Asia, said Mr Kaye.

He added that its office here will operate a "hub and spoke" model, with Singapore at the centre liaising with members of the firm based on the ground in key markets like Vietnam and Indonesia.

The firm is starting with six people in the office. It has already invested in the region. A Warburg Pincus-led consortium has pumped about US$300 million into Vincom Retail, the largest shopping mall operator in Vietnam.

In Indonesia, the firm has invested in real estate developer Nirvana Development.

It has also invested in at least two Singapore-based firms: software solutions provider Capillary Technologies and engineering services provider Quest.

"We come, not as a tourist, but as an existing investor in the region, with a broad Asian footprint," said Mr Kaye. "We're committed to be here over the long haul."

While the economic outlook for the region has been patchy - especially on the back of wobbles in China, one of Asia's key growth drivers - and investors everywhere are struggling to find yield, the firm is confident in its focus on long-term fundamentals.

"(Asia) is the part of the world that's still growing... This part of the world has growth at a more compelling valuation than anywhere else," said Mr Kaye.

Mr Perlman, who was previously based in the company's Hong Kong office and has relocated here to head the Singapore operations, added: "Even in a market like China, where growth is slowing, the new economy sectors - technology, healthcare services, new forms of real estate such as institutional rental apartments - are growing.

"Across South-east Asia, there's a young population that's earning and consuming more and we think that trend is very favourable for longer-term investment."

Mr Perlman said Warburg Pincus is interested in companies of all sizes - from start-ups to listed firms.

"We want to find talented entrepreneurs at every stage of the life cycle... The central focus is growth," he added.

This extends to helping portfolio companies expand across the region and beyond.

Mr Kaye attributed the firm's success in Asia to its "willingness to find talented entrepreneurs and grow with them over time". "South-east Asia will be the next evolution of that," he added.

A version of this article appeared in the print edition of The Straits Times on July 19, 2016, with the headline 'Warburg Pincus sets up office in S'pore'. Print Edition | Subscribe