CIMB Standard buys Babcock stake in Asian infra fund

The Malaysia- and Singapore-based private equity firm has acquired Babcock & Brown’s interest in the latter’s Asia Infrastructure Fund, marking the firm’s first investment in Thailand.

CIMB Standard Strategic Asset Advisors, a joint venture between Malaysian financial services group CIMB and Johannesburg-headquartered Standard Bank, has acquired Babcock & Brown’s interest in Babcock & Brown Asia Infrastructure Fund (BBAIF) for an undisclosed stake.

The investment was made from the South East Asia Strategic Assets Fund (SEASAF), a $147 million private equity fund that closed in 2006 and invests in energy, infrastructure and natural resources in Southeast Asia.

BBAIF is an infrastructure fund set up in 2007 and co-sponsored by The Bank of Tokyo-Mitsubishi and Babcock & Brown to focus on infrastructure investment opportunities in Asia, primarily in China, India, Hong Kong, Japan, Malaysia, South Korea, Singapore and Thailand. The fund is based in Thailand.

When the fund was launched in 2007, the firms intended to raise a minimum of $1 billion for the fund, Johan Bastin, chief executive officer of CIMB Standard, told Infrastructure Investor's sister publication PEI Asia. He added that upon an initial closing, the fund acquired a 30 percent interest in the Don Muang Toll road in Bangkok. 

“Due to the developments in the financial markets in 2008, no further assets were acquired and fund raising was halted without having achieved this minimum target,” Bastin said. He added that CIMB Standard does not intend to resume fundraising at this stage.

Following the acquisition of Babcock & Brown’s limited partner interest in the fund and its interest in the fund manager, the fund has been renamed Asia Infrastructure Fund.

With this acquisition, CIMB Standard effectively takes over BBAIF’s Bangkok office and gains a presence on the ground in Thailand, which is one of SEASAF’s main markets.

SEASAF has now deployed about $100 million and is on schedule to be fully invested in 2010, Bastin said. The firm expects to launch a successor fund, SEASAF II, in the middle of that year, he added.

In July this year, CIMB Standard held an initial close on the Islamic Infrastructure Fund which has the Islamic Development Bank and the Asian Development Bank as sponsor investors seeding the fund with an initial joint commitment of $250 million. The fund is targeting commitments of $500 million.

The firm expects two senior investment professionals, Duncan Black and Kanoklada Rerkasem, to join its team starting from October, Bastin added. Black was the former chief executive officer of BBAIF and Rerkasem, a Thai national, was a director at BBAIF starting 2005.

CIMB Standard also plans to open an office in Jakarta later this year and is looking towards establishing a presence in Central Asia in 2010.

Babcock & Brown was formerly an investment and specialised fund management group and had set up a funds management platform across real estate, infrastructure, operating lease and corporate and structured finance. It went into voluntary administration in March 2009.