NH Investment & Securities Co. plans to create a private equity fund (PEF) in Indonesia, one of the fastest-growing economies in Asia, and is expected to provide lucrative market opportunities.
According to industry sources on July 7, the Korean stock brokerage house will create a fund jointly with a general partner (GP) in Indonesia to invest in promising local companies. The brokerage will set up a PEF worth up to 200 billion won ($172.4 million) that is expected to begin investment as early as late this year.
NH Investment & Securities’ decision to enter the Indonesian PEF market comes after “consumer product companies in Indonesia have recently received attention for their potential growth along with a fast increase in the middle-income class in the country, which is expected to become the largest consumer market in ASEAN,” said an official in the IB industry. He added that the Korean securities firm is seeking investment opportunities among those promising consumer goods firms in the country.
Following the latest decision, NH Investment & Securities will also be able to create synergy with its local entity NH Korindo Securities regarding the investment banking business. NH Investment & Securities and NH Korindo Securities are realigning their IB organizations in Indonesia. When a PEF is founded, the stock broker will be able to identify various business opportunities in financing and IPO services in connection with the PEF.
An official at NH Investment & Securities said the PEF creation is in a preparatory stage, but it can be new business opportunities, given the market’s growth potential.
NH Korindo Securities was founded in 2009 jointly with Korindo Group, a leading Indonesian business run by a Korean native. NH Investment & Securities owns an 80 percent stake in NH Korindo Securities.
NH Korindo Securities is focusing on business related to institutional investors who represent nearly 80 percent of the Indonesian stock market, and recently expanded its business area into bond business and online sales. The brokerage currently ranks in the country’s top 30 brokerages in Indonesia thanks to the joint-venture securities firm’s various moves to expand its operations.
NH Investment and Securities started providing online transactions of securities in Indonesia, a first for a Korean securities broker operating in the S.E. Asian country.
NH Korindo Securities has also been providing online securities trading to cope with rising orders by domestic investors to invest in Indonesian securities. The securities dealer recently strengthened its systems to help Korean investors make investments in Indonesian securities on a stable basis.
South Korea’s NH Investment & Securities Co. plans to form a private equity fund in Indonesia, one of the fastest-growing economies in Asia and with a rapidly expanding population, that is expected to provide lucrative market opportunities.
In the meantime, NH Investment and Securities, jointly with FG Asset Management, bought the Red Cross Building in Sydney, Australia, for 100 billion won.
According to Investment Banking sources on July 7, the two firms set up a fund jointly and bought the building located in the center of Sydney for 98 billion won in which the Korean securities firm invested its common stocks for about half of the total price. The securities firm will kick off its investment drive in real estate overseas with its investments in the sale down of the NH Investment and Securities stake in the Sydney building. The Korean stock brokerage house expects to make around 7 percent in annual profit from its stake in the Red Cross building in Sydney.
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