Temasek Could be Incubating the Next Thoma Bravo with 65 Equity Partners
Posted on 10/27/2021
Private equity is a lucrative business in the current environment and sovereign wealth funds and public pensions want a bigger slice of the pie. For example, CPP Investments owns Antares Capital, while Wafra Inc. and the Alaska Permanent Fund Corporation back Capital Constellation. According to SWFI.com deal data, Temasek is one of the most active direct investors over the past decade investing in all types of companies, which could be merged or form alliances with local Singaporean companies.
SWFI reported earlier on the creation of 65 Equity Partners. Singapore’s Temasek Holdings has made it official about the creation of 65 Equity Partners, a platform based in Singapore that will be owned by Temasek. 65 Equity Partners has been incorporated to focus on equity and structured equity investments, starting with Singapore and building on its presence across Southeast Asia, Europe, and the United States. 65 Equity Partners will have funds under management of S$ 4.5 billion, and will principally invest in established companies with regional or global aspirations and market values between approximately US$ 1 billion and US$ 5 billion. Of that S$ 4.5 billion amount, roughly 36% will come directly from the Singapore Government, while the remaining S$2.9 billion will come from 65 Equity Partners or Temasek Holdings.
Targets
The platform aims to provide flexible capital solutions to address a wide range of situations including growth funding, M&A financing, shareholding re-organizations, balance sheet optimizations as well as privatizations, and cornerstone investments. The platform will target deal sizes of between US$ 100 million and US$ 200 million.
Importantly, 65 Equity Partners seeks to partner with fundamentally sound and well-managed businesses with clear growth strategies over the long term. It will invest across industries with strong structural tailwinds, such as consumer, industrial & business services, logistics, healthcare, and technology, underpinned by committed owners and management teams.
Operations
65 Equity Partners’ strategy is to provide capital solutions to large local enterprises, and catalyze their growth as they pursue their regional expansion and transformation strategies. In Singapore, it also plans to work closely with other Singapore-focused funds such as Heliconia Capital Management, Tower Capital Asia and Novo Tellus Capital Partners. 65 Equity Partners is managed by a core team of investment professionals led by CEO Mr. Tan Chong Lee, who also holds the position of President of Temasek International. It is also expanding its international footprint by building its team across offices in Europe and the U.S., in addition to its headquarters in Singapore. 65 Equity Partners plans to have 40 people working in it, with some people being moved from Temasek Holdings.
65 Equity Partners currently manages Local Enterprise Fund @ 65, a joint S$1 billion fund with the Singapore Government, led by the Ministry of Trade & Industry to develop regional champions, as well as Anchor Fund @ 65, a S$1.5 billion co-investment fund announced in September 2021 that will support new economy businesses and regional market leaders ahead of their public fundraising in Singapore’s public equity market. 65 Equity Partners has earmarked S$ 2 billion for its international strategy, which totals the S$ 4.5 billion total AUM.
Playbook
In August 2021, Singapore-listed investment firm GK Goh Holdings (GKGH) proposed to sell its entire 92% stake in corporate-services provider Boardroom to a Temasek-related consortium for around S$ 312 million. Apricus Global Pte. Ltd. is an investment vehicle owned by the consortium comprising Temasek-linked 65 Equity Partners Holdings and private equity firm Tower Capital Asia. The buyer group made the cash offer price of S$1.48828 for each Boardroom share, which values Boardroom at around S$ 312 million. Credit Suisse had acted as exclusive financial adviser to GKGH on the sale.
65 Equity Partners could eventually open up its fund to outside investors, a move done by other Temasek entities like Vertex Ventures. Public pension funds and other sovereign wealth funds are keen on tapping middle market or growth equity Asian companies, according to SWFI Compass data.
Keywords: Public Institution for Social Security of Kuwait (PIFSS).
