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INDIA VALUE FUND ADVISORS REBRANDS AS TRUE NORTH (MANAGERS)

From: Live Mint E-Paper

Private equity firm India Value Fund Advisors has unveiled a new brand identity, renamed itself True North (Managers), and plans to expand its investment focus to technology products and services, it said on Wednesday.

“Our name has changed but our values remain intact which defines the core values and principles that have moulded the functioning of our company for more than a decade,” said Vishal Nevatia, managing partner of True North.

“One of the reasons for this rebranding is that we have a very unique business model whereby we are combining the business nurturing skills of a conglomerate with the sharpness and focus of a private equity group. Nobody has done that before in India, and even globally there are very few examples,” added Nevatia.

Along with the change in identity, it also announced a realignment of its sector focus. It has restructured its business and investment teams in line with sectoral specializations— financial services, consumer sector, healthcare, and technology products and services.

On 20 September, Nevatia said in an interview that the company is looking to move beyond the healthcare, financial services and consumer sectors and will add technology and services companies to its investment portfolio.

He added that India Value Fund saw opportunities in mid-sized information technology firms, start-ups and other digital businesses, and companies operating in hi-tech areas such as cloud computing and analytics. Over the past year, the PE firm has developed expertise in sectors like healthcare, consumer-focused industries (like media and entertainment, radio taxis, retailing, and food services) and financial services.

“We will become sector-focused. We decided that it’s better to do few things, but do them best. We feel that India has now evolved so even if we are sector-focused, there are enough things to do. We feel that there is enough depth in sectors. We are adding a fourth sector, which we haven’t looked at in the past—technology product and services. We believe that in the next 10-15 years, 80-90% of our investments will be in these four sectors,” he said, adding that the company is now in the process of hiring a senior executive to lead the vertical.

True North, one of the early movers in Indian private equity, and is largely known for executing control transactions in India’s mid-market.

In the last 17 years, the firm has worked with over 30 businesses and invested over Rs8,000 crore of equity capital.

Currently, it is investing out of its fifth fund, Indium Fund V, and has deployed more than a third of the $700 million (Rs 4,471 crore) corpus.

The fund’s investments include deGustibus Hospitality Pvt. Ltd, which owns and operates restaurant brands Indigo and Indigo Deli, non-banking financial company Magma Fincorp Ltd, and seed company SeedWorks International Pvt. Ltd.

The fund also invested in Atria Convergence, in which India Value Fund had invested previously.

True North has $500 million in dry powder from the latest fund and an additional $500 million of co-investment commitments from limited partners, or investors in PE funds.

CITIC LIMITED, CITIC CAPITAL, THE CARLYLE GROUP AND MCDONALDS FORM STRATEGIC PARTNERSHIP TO EXPAND IN MAINLAND CHINA AND HONG KONG

New Partnership Will Become the Largest McDonald’s Franchisee Outside the United States

CITIC Limited (SEHK:00267, “CITIC”), CITIC Capital Holdings (“CITIC Capital”), The Carlyle Group (NASDAQ: CG, “Carlyle”) and McDonald’s Corporation (NYSE: MCD, “McDonald’s”) today announced the formation of a partnership and company that will act as the master franchisee responsible for McDonald’s businesses in mainland China and Hong Kong for a term of 20 years.

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The total consideration payable by the new company to acquire McDonald’s mainland China and Hong Kong business is up to US$2.08 billion (approximately HK$16.14 billion). The consideration will be settled by cash and by new shares in the company issued to McDonald’s. After completion of the transaction, CITIC and CITIC Capital will have a controlling stake of 52%, while Carlyle and McDonald’s will have interests of 28% and 20%, respectively.

The partnership will use its combined expertise and resources to accelerate growth in McDonald’s business through new restaurant openings, particularly in tier 3 and 4 cities, and to improve sales performance in existing restaurants. The focus will be on key areas such as menu innovation, enhanced restaurant convenience, retail digital leadership and delivery. It intends to add over 1,500 restaurants in China and Hong Kong over the next five years.

McDonald’s CEO Steve Easterbrook said, “China and Hong Kong represent an enormous growth opportunity for McDonald’s. This new partnership will combine one of the world’s most powerful brands and our unparalleled quality standards with partners who have an unmatched understanding of the local markets and bring enhanced capabilities and new partnerships, all with a proven record of success. By working together, we will unlock even faster growth and be closer to the customers and communities we serve as McDonald’s works to be the leading Quick Service Restaurant across the Chinese mainland and Hong Kong.”

China’s consumer sector is growing rapidly, benefiting from continued urbanisation, an expanding middle class and increasing disposable household incomes. China’s working population is larger than those of the US and Europe combined, yet spending levels of China’s middle class are a small fraction of those in more developed countries. As disposable incomes rise, people will continue to spend more on leisure and dining out, particularly in tier 3 and 4 cities where there is great growth potential. As such, the market for Western Quick Service Restaurants is expected to continue to grow rapidly.

For CITIC, this investment offers a chance to deepen its exposure to the consumer sector, which is poised to be the main driver of China’s economy for decades to come. This transaction is another step in CITIC’s efforts to better balance its financial and non-financial businesses. CITIC also sees opportunities for synergies with its existing businesses.

Mr Chang Zhenming, Chairman of CITIC Limited, commented: “We believe CITIC’s unique platform and its extensive resources will enable us to help realise McDonald’s full potential in China. Together with our partners, we will devote ourselves to continue upholding McDonald’s extremely high standards of food quality and service. Importantly, this is also a strategic opportunity for CITIC to invest in the expanding Chinese consumer sector. McDonald’s extensive network and consumer base will provide us with invaluable insights, which we will leverage to the benefit of our existing businesses.”

For Carlyle, this investment offers the chance to partner with an iconic brand with sizeable market share and growth potential in China. Carlyle has years of strong investment and operating experience in the global consumer and retail sector, and is well positioned to drive further growth of the new company. Equity for this transaction will come from Carlyle Asia Partners IV. Carlyle has invested more than US$7 billion of equity in approximately 90 transactions in China, as of 30 September 2016.

Mr X.D. Yang, Managing Director and Co-Head of the Asia buyout team of The Carlyle Group, will serve as Vice Chairman of the board of the new company. He said, “Carlyle and CITIC have a strong history of partnering together. Today, we are pleased to cooperate with CITIC again, alongside McDonald’s, on one of our largest deals in China. This substantial investment demonstrates our confidence in the strength of the Chinese consumer.”

Mr Yichen Zhang, Chairman and CEO of CITIC Capital, will serve as Chairman of the board of the new company. He said, “McDonald’s core business proposition and potential in China is clear. We will work closely with the existing management team and partners, including Beijing Capital Agribusiness Group, to respond to local market expectations and continue to expand and improve the business to meet the needs of the Chinese consumer.”

As part of its turnaround plan announced in May of 2015, McDonald’s committed to refranchising 4,000 restaurants by the end of 2018, with the long-term goal of becoming 95% franchised. As a result of this transaction, McDonald’s is refranchising more than 1,750 company-owned stores in China and Hong Kong.

As of 31 December 2016, McDonald’s operates and franchises over 2,400 restaurants in mainland China and more than 240 restaurants in Hong Kong. It has built one of the strongest brand names and most robust systems in the region over the past three decades. Currently employing over 120,000 staff and serving over one billion customers annually in China, McDonald’s is the second largest Quick Service Restaurant chain in China and the largest in Hong Kong.

Upon completion of the transaction, the new company will have a board of directors with representatives from CITIC, CITIC Capital, Carlyle and McDonald’s. McDonald’s existing management team will continue to lead the business.

The deal is contingent upon relevant regulatory approvals. The deal is expected to close in mid-2017.

This press release should be read in conjunction with the full text of the HKEX Announcement dated 9 January 2017, which is available on www.hkex.com.hk.

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About CITIC Limited

CITIC Limited is China’s largest conglomerate operating domestically and overseas, with businesses in financial services, resources and energy, manufacturing, engineering contracting and real estate as well as others. CITIC’s rich history, diverse platform and strong corporate culture across all businesses ensure that CITIC Limited is unrivalled in capturing opportunities arising from China’s continued growth. CITIC Limited is listed on the Stock Exchange of Hong Kong (SEHK: 00267), where it is a constituent of the Hang Seng Index. CITIC Group, a Chinese state owned enterprise, owns 58% of CITIC Limited. For more information about CITIC Limited, please visit the company website at www.citic.com.

About CITIC Capital

Founded in 2002, CITIC Capital is an alternative investment management and advisory company. The firm manages over US$8 billion of capital from a diverse group of international and Chinese investors. Core businesses include Private Equity, Real Estate, Structured Investment and Finance, Asset Management and Venture. CITIC Capital currently employs over 200 staff members throughout its offices in Hong Kong, Shanghai, Beijing, Shenzhen, Tokyo and New York. The firm combines a deep knowledge of the Chinese business and financial markets with world-class investment expertise to create and maximize value for its investors.

About The Carlyle Group

The Carlyle Group (NASDAQ: CG) is a global alternative asset manager with US$169 billion of assets under management across 125 funds and 177 fund of funds vehicles as of 30 September 2016. Carlyle is one of the largest investors in China, having pursued approximately 90 investments over almost 20 years in China. Carlyle’s purpose is to invest wisely and create value on behalf of its investors, many of whom are public pensions. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Market Strategies and Investment Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has expertise in various industries, including aerospace, defence & government services, consumer & retail, energy, financial services, healthcare, industrial, real estate, technology & business services, telecommunications & media and transportation. The Carlyle Group employs more than 1,625 people in 35 offices across six continents.

About McDonald’s

McDonald’s is the world’s leading global foodservice retailer with over 36,000 locations in over 100 countries. More than 80% of McDonald’s restaurants worldwide are owned and operated by independent local business men and women.

FSN CAPITAL PARTNERS CLOSES NEW SEK 9.62 BILLION (€1.0 BILLION) NORDIC MID-MARKET BUYOUT FUND

FSN Capital Partners (“FSN”), a pan-Nordic mid-market private equity advisor, announces the final closing of FSN Capital V, which was oversubscibed at its hard cap. The Fund received strong support from existing and new investors, with total commitments of SEK 9.62bn (€1.0 billion).

fsn-logo_png FSN Capital V held its final close on December 16th at its hard cap of SEK 9.62 billion (€1.0 billion), exceeding the SEK 8.5 billion (€870 million) target. The prior fund advised by FSN, FSN Capital IV, closed in 2013 at SEK 5.42 billion (€624 million).

The Fund’s investors comprise a well-diversified group including public and private pension funds, endowments, sovereign wealth funds, insurance companies, government agencies, asset managers, banks and funds of funds. FSN has also significantly broadened its international investor base, with new LPs secured from Asia, the Middle East and the United States. 29% of the total capital raised for FSN Capital V came from LPs based in North America, 13% from Asia and the Middle East, and 34% from Europe excluding the Nordic region. The Fund also attracted strong support from the Nordic LP community, with leading LPs from all four Nordic markets accounting for the remaining capital raised.

“We are delighted with the strong support we have received from existing LPs and are privileged to welcome a number of leading, blue chip investors from around the globe as new limited partners”, said Frode Strand-Nielsen, Managing Partner of FSN.

FSN Capital V will continue FSN’s proven investment strategy of targeting control buyout investments of Nordic mid-sized growth-oriented companies operating in Sweden, Denmark, Norway and Finland where FSN believes it can generate long-term alpha returns for the investors. It will target companies with enterprise values typically between SEK 500 million and SEK 3 billion (approximately €50 million to €300 million) and operating in a broad range of industries and markets.

FSN will continue its strong focus on integrating sustainable and responsible investment practices into the investments.

“FSN Capital V is positioned in an attractive segment of the market as one of the largest middle-market focused funds in the Nordic region” said Peter Möller, Partner of FSN. Thomas Broe-Andersen, Partner of FSN, added “we continue to see a large number of attractive investment opportunities and are confident of delivering strong returns to the investors.”

LIVINGBRIDGE RAISES £660M TO INVEST IN UK SMES

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Livingbridge has successfully raised £660m, its largest fundraise to date, which it will focus on investing in SMEs across the UK.

The fund, Livingbridge’s eighth since it was founded in 1995, will invest in growth equity or buyout transactions of entrepreneurial, high growth companies predominantly in the UK. The fund will focus on investing in companies with enterprise values typically between £20m and £75m across a variety of sectors ranging from business and financial services to TMT, consumer markets and healthcare & education.

Known as Livingbridge 6, the fund has a diversified and global investor base with Limited Partners from across the UK, Europe, and America drawn from insurance companies, public and corporate pension funds, fund of funds and family offices.

The successful fundraise caps a busy period of activity for Livingbridge which saw the firm complete its 100th investment in April this year following the management buyout of Thomas J Fudges, a 100-year-old family business selling premium biscuits.

In total, Livingbridge has completed eight transactions since the start of the year, investing in businesses such as Southern Communications, one of the UK’s most established telecommunications business, digital recruitment specialist Up Group, and Direct Ferries, the world’s largest online ferry ticket aggregator. It has also successfully exited businesses such as corporate travel agent Reed & MacKay, IT infrastructure services provider Onyx and Frank Recruitment Group, a global staffing business.

This latest fundraise follows Livingbridge’s successful close of its Enterprise 2 fund in September 2015, which raised £220m to invest in smaller SMEs. Overall the Livingbridge platform is able to provide equity funding of £2m to £40m to companies of a range of sizes, specialising in supporting the management teams of fast growth businesses.

Wol Kolade, Managing Partner at Livingbridge said:
“We are delighted to have secured the support of such a high quality international investor base. This is testament to both our strong track record and the significant opportunity that exists to deliver excellent returns backing fast growth UK SMEs. The EU referendum result may have injected a degree of uncertainty into the UK economy but SMEs and entrepreneurs have proven time and time again that they are able to adapt and thrive in precisely this sort of environment.”