OCBC, Lion Global create private-equity fund with external investors

OCBC Bank and its asset management subsidiary Lion Global Investors announced on Thursday that the Lion-OCBC Capital Asia Fund I, L.P. has closed successfully.

They said this is the first time OCBC, through its private-equity investment unit Mezzanine Capital Unit (MCU), has created a private-equity fund investing in small and medium companies in Singapore, Malaysia, Indonesia and China for institutional investors and high net worth individuals (HNWIs).

The fund, which started out with S$400 million, has grown by nearly 40 per cent to S$550 million due to investor demand.

It took nine months to secure investor subscription after the fund was launched in late November 2014.

A fund of this size would typically take more than a year to close, they said.

Daniel Kwan, head of MCU, said: "We introduced this fund to meet growing interest in alternative assets from our market partners and high net worth customers in Bank of Singapore. Investors in the fund were attracted by the superior returns that MCU has consistently delivered for OCBC of more than 20 per cent internal rate of return in the past six years as its private equity unit, as well as by the fund's unique positioning as a bank-sponsored investment fund."

Gerard Lee, chief executive officer of Lion Global Investors, noted that alternative investments have found a growing audience among those seeking alpha solutions in an uncertain global economic environment.

He added the fund will open doors for Lion Global to reach out to investors who have shown increasing interest in alternative strategies.

Among the fund's investors are insurance companies, regional banks, sovereign wealth funds and HNWIs, including customers of OCBC Bank's private banking subsidiary, Bank of Singapore.