TPG Capital eyes Indonesian assets

David Bonderman, TPG’s founder, reportedly has said he is interested in the country’s aviation sector, including airports.

TPG Capital, the $47 billion-plus private equity firm, has expressed interest in investing in Indonesia’s aviation industry, Reuters reported this week.

On Tuesday, TPG founding partner David Bonderman met with Indonesia's Vice President Boediono, a discussion in which possible investments by TPG were mentioned, a spokesman for the vice president said in the report.

“There are some areas that they are targeting which are aviation industries, airlines, and airport infrastructure”, the spokesman said in the report.

TPG is no stranger to the airline industry.  In a signature 1993 deal, the predecessor firm to TPG bought Continental Airlines out of bankruptcy, re-selling it in 1998 for ten times the purchase price.  In 2006, the firm made an unsuccessful joint bid with Macquarie Group for Australian airline Qantas Airways.

Nor would this be TPG’s foray into Indonesia.  In 2006, TPG committed $15 million to a $110 million Indonesia-focused fund organised by private equity investment manager Northstar. The fund has since made investments in the oil and gas, mining, retail, telecommunication and banking sectors.  

A little over three years ago, TPG, together with Northstar, was keeping close tabs on Garuda Indonesia, the country’s national airline and flag carrier.  Garuda is currently undergoing debt restructuring, a process it expects to complete by the end of the year, ahead of becoming partially privatised through an IPO that is scheduled for February 2011. 

Known for its private equity investing, TPG is expanding its mandate to include other forms of private investment, including real estate and real estate-related assets, echoing activity in distressed real estate deals that it took up in the early 1990s.  A $1.1 billion joint venture with Dublin’s Green Property, aimed at acquiring commercial properties in the UK and Ireland in partnership with government agencies and financial institutions, was announced in June.

Bonderman himself has reportedly spent time trekking through the rural areas of Indonesia and Malaysia, interacting with the locals.