DUBAI,(RTRS): A Kuwaiti investment firm affiliated to the Gulf state’s sovereign wealth fund is eyeing stakes in fund and asset managers operating in China and plans to set up a Chinese property fund, a company executive said.
Kuwait China Investment Co (KCIC) Chief Financial Officer Faisal Nawaz said the firm was expecting a return on investment of 15 to 19 percent, having already invested in private equity funds.
“I think that’s very reasonable, because at that stage you can manage the risk very well ... I think there are real investors who are long-term and who are happy with reasonable returns,” he said.
Gulf Arab oil exporters, including Kuwait, have amassed large surpluses from an oil price rally between 2002 and 2008, which enabled them to snap up foreign assets to diversify their risk.
Diversification
“If you look at the number of people moving from (Chinese) rural to urban areas it sets the stage for expansion,” Nawaz told Reuters on the sidelines of a property conference in Dubai.
“The interest we have seen is from investors with a diversification point of view,” he said. “People are now more keen on Asia.” Kuwait Investment Authority owns 15 percent of KCIC, which was set up in 2005 with a paid-up capital of about $300 million. Al-Ghanim Industries, a family conglomerate, also holds a stake.
China has attracted about $1.25 billion a week in foreign direct investment since it joined the World Trade Organisation in 2001. But Western executives complain some sectors where they have a proven advantage are off limits as Beijing seeks to give local companies a chance to develop their businesses.
Nawaz said KCIC would combine buying into firms and setting up funds to facilitate its entry into the property market. “There are a couple (of firms) on the real estate side which we want to take stakes in — real estate managers — hopefully this will pan out at the end of this year.
“You must have the right people on the ground in order to do business in these countries,” he said. “Once we have the infrastructure in place then the next step would be to look at specific funds ... diversification so investors don’t have to go in just one project but a multitude of projects.”
Nawaz said the first property fund worth as much as $300 million would focus on Asian real estate as a whole, including in China, India and ASEAN countries.
Management
KCIC, an asset management firm, was set up to become an investment vehicle in Asia to tap into the emerging market economies’ potential growth. Nawaz said the firm had already backed the Jade China Value Partners, a private equity fund of funds to invest in private equity funds operating in mainland China.
“We launched the first private equity fund-to-fund for China and raised about $100-plus million in the fund ... we should be marketing the second fund hopefully next year.”
Kuwait China Investment Co’s (KCIC), an asset management firm, had a long-term strategy to invest in the agricultural sector, but no deals were imminent, Faisal Nawaz told Reuters.
“There is a lot of farmland in Far East Asia that is either undeveloped or underdeveloped,” Nawaz said in an interview late on Tuesday. “Our proposition to the governments is that we can help them develop the infrastructure and develop the farmland and we will then take a share of the produce.”
Kuwait has said it is interested in investing in agriculture and farmland in both Asia and Africa as it looks to diversify food sources.
The world’s fourth-largest oil exporter has been looking at investing in the Far East to help diversify its revenue away from heavy reliance on oil exports.
Nawaz said KCIC saw itself as an “ambassador” for Kuwait to seek out opportunities in the agricultural sector, although deals could still take as much as three years to conclude. KCIC had approached governments in Vietnam, Cambodia and Laos, Nawaz said.
“Vietnam will always be there,” he said. “They are very open to suggestions, willing to work with us ... Cambodia, Laos are two other countries we have approached and we are seeing a good reaction.” The firm’s managing director said in July it was looking to invest in Asian agribusiness and farming projects producing crops such as rice, wheat and corn for purely commercial reasons.
“It’s a model which is difficult to put a timeline on because we are in discussions with multiple governments and unless we can find the right proposition ... whether it takes two years or three is difficult to pin down,” Nawaz said.
The desert state, which imports most of its food, sent a delegation headed by the prime minister and included the head of Kuwait Investment Authority (KIA), visited eight Asian countries last year to boost trade ties and discuss food imports. KCIC, which was established in 2005 with a capital of 80 million dinars ($278.7 million), is also looking at investments in the energy sector and equities and wants to buy stakes in firms in the financial and real estate sectors.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment