NH Investment & Securities planning to enter PEF market in Indonesia

South Korea’s NH Investment & Securities Co. plans to form a private equity fund in Indonesia, one of the fastest-growing economies in Asia with a population expanding at a rapid rate that is expected to provide lucrative market opportunities.

According to industry sources on Friday, the Korean stock brokerage house will create a fund jointly with a general partner (GP) in Indonesia to invest in promising local companies. The brokerage will set up a PEF worth up to 200 billion won ($172.4 million) that is expected to begin investment as early as late this year.

NH Investment & Securities’ decision to enter the Indonesian PEF market comes after “consumer product companies in Indonesia have recently received attention for their potential growth along with a fast increase in the middle-income class in the country, which is expected to become the largest consumer market in ASEAN,” said an unnamed official at the IB industry. He added that the Korean securities firm is seeking investment opportunities among those promising consumer goods firms in the country.

Following the latest decision, NH Investment & Securities will also be able to create synergy with its local entity NH Korindo Securities regarding the investment banking business. NH Investment & Securities and NH Korindo Securities are realigning their IB organizations in Indonesia. When a PEF is founded, the stock broker will be able to identify various business opportunities in financing and IPO services in connection with the PEF.

An official at NH Investment & Securities said the PEF creation is in a preparatory stage, but it can be new business opportunities given the market’s growth potential.

NH Korindo Securities was founded in 2009 jointly with Korindo Group, a leading Indonesian business run by a Korean native. NH Investment & Securities owns an 80 percent stake in NH Korindo Securities.

NH Korindo Securities is focusing on business related to institutional investors who represent nearly 80 percent of the Indonesian stock market, and recently expanded its business area into bond business and online sales. The brokerage currently ranks in the country’s top 30 brokerages in Indonesia.

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