Newbridge Capital has appointed Tim Dattels as a managing director and John Olds as a senior advisor. The private equity group is the Asian JV between Texas Pacific Group and Blum Capital Partners and has been one of the biggest private equity investors in the region for a number of years.
Dattels is the ex-head of Asian investment banking at Goldman Sachs, a position he held from 1996-2000 when he went to Menlo Park to run Goldman's office there. He retired from Goldman in 2002. In 2003 he became a senior advisor to Newbridge in between cycling trips across British Columbia and expeditions to the Galapagos Islands and Africa.
While in San Francisco he met up again with John Olds, who had run DBS in Singapore as well as JPMorgan's activities in Asia over a 28-year stint. The appointment of Olds as a senior adviser to Newbridge comes within the same week that Newbridge is finalizing its acquisition of 18% of Shenzhen Development Bank.
It is understood that Olds will have much input into that investment, which has been almost three years in the making for Newbridge.
The appointment of two such luminaries to Newbridge is a clear statement of intent. Dattels will be a senior dealmaker for the firm as well as a strategist for Newbridge's general direction in the region.
"In the next ten years, private equity can become a real business in Asia," he says. "It had been dominated by craftsmen, but it's now becoming much more of an institutionalized business."
Echoing that statement is related news that the firm is probably looking to raise a new fund. Newbridge currently has $1.8 billion under management in three funds. The third fund, of nearly $750 million, is almost fully invested and so new funds will be needed.
However, Dattels believes the business is not just about the money; rather it is about what you do with the money. "Asia has never been short of capital. It just needs to be redeployed and priced as efficiently as possible," he says.
He believes that investment opportunities will arise as other industries replicate the consolidation taking place in the financial and telecoms sectors. Moreover, if the US dollar continues to weaken, Asian assets look like good bets for dollar-sourced investors, who can get a good kicker from the currency appreciation.
Finally the maturation of the Asian capital markets - Hong Kong has been the world's biggest IPO market outside the NYSE this year - makes it easier for financial buyers to vest their holdings over time. And if there is something that private equity buyers like better than getting into good deals, it is getting out of them.
With an investment portfolio that includes Hanaro Telecom and Korea First Bank in Korea, Matrix Pharmaceuticals in India, Shenzhen Development Bank in China and possibly Takefuji in Japan, Newbridge is clearly a firm that goes for the big deals. This is a trend that Dattels sees continuing. "This is not a business of singles and doubles," he says. "You need to hit home runs."
