Another success story for Creador
PETALING JAYA: Homegrown private equity firm Creador Sdn Bhd is on a tear. As it brings to market today the largest listing of the year in the form of CTOS Digital Bhd, the fund has also just hit another record.
It has raised US$500mil (RM2.1bil) in just four months of pitching to investors for its latest fund and that too is all done electronically, without the benefit of face-to-face meetings, a source said.
The sum raised in the four months for this fund is a record “first close” of Creador, which was founded by its chief executive officer Brahmal Vasudevan.
“It is rare for a private equity fund to raise money without face-to-face meetings, considering the nature of the industry that depends on private networks and strong relationships.
“But I guess when you have a proven record and trust built-up, investors have no reason not to cut that cheque after a zoom call,” said one industry player.
This is Creador’s fifth fund and it was participated by most of the investors from its previous fund.
Sources also said that Creador expects the fifth fund to have a close of US$680mil (RM2.9bil) by year-end and that at least three investments have been identified for the fund.
These include a digital bank in South-East Asia, where countries like Singapore and Malaysia have already issued licences, while the Philippines and Thailand have plans for such licences. In Indonesia, digital banks tend to operate under traditional banking licences.
Sources added that Creador has identified two other areas for its fifth fund – a regional data and analytics platform and, surprisingly, a retail play.
Creador declined to comment for this article.
In 2017, Creador had invested in Malaysia’s Bake With Yen Group (BWY), a 15-outlet baking ingredient retail chain. It is understood that BWY had thrived during the pandemic through expansion and online sales as more customers are baking at home.
Meanwhile, strong interest in CTOS has led it to attract an oversubscription rate of 27.57 times, which entailed applications worth some RM1.4bil chasing RM48.4mil worth of CTOS shares for its public portion.
For its institutional offering of 936 million shares, over half of that was taken up by 23 cornerstone investors. These included the Employees Provident Fund Board, Permodalan Nasional Bhd, Aberdeen Standard Investment, AIA, Eastspring Investments, FIL Investment Management and JP Morgan Asset Management.
CTOS said that of the remaining initial public offering (IPO) shares available for institutional bookbuilding, it saw an overwhelming demand of over RM6.5bil.
Creador had first invested in CTOS back in 2015 and has been its largest shareholder with an 80% stake. It is selling half of its holdings via the IPO, which would halve its stake to around 40% post-listing, and net the fund proceeds of around RM792mil. This in turn gives Creador an internal rate of return of around 33% for that partial exit.
Strong interest in CTOS has also been driven by Creador’s success with the listing of MR DIY Group (M) Bhd last October.
MR DIYMR DIY
MR DIY, which had its detractors, has done very well. Listed on the Main Market in October 2020, the home improvement retailer’s market capitalisation has doubled from RM10.98bil on the first day of trading to RM21.5bil as of last Friday’s closing price RM3.42.