ADB invests in Creador-managed fund

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The Asian Development Bank (ADB) has invested $60 million in a private equity firm to provide capital for companies based in South and Southeast Asia.

The ADB’s investment in Creador V L.P. (Creador V) aims to create investments in firms in the two regions in the hope of generating new jobs, increasing tax revenues, and improving access to health and financial services.

Creador V will provide growth capital primarily to middle-market companies operating in business services, consumer goods and services, health care, pharmaceuticals, financial services, and manufacturing in India, Indonesia, Malaysia, the Philippines, and Viet Nam. Creador may also selectively consider investments to support businesses in Bangladesh, Singapore, Sri Lanka, and Thailand.

“Creador has evolved into one of the leading institutional private equity platforms in Southeast Asia,” said ADB Private Sector Investment Funds and Special Initiatives Division Director Janette Hall. “ADB is proud to continue our partnership with Creador as they remain focused on markets and sectors where ADB seeks to build out our equity portfolio.”

This is ADB’s third investment in a Creador-managed fund following investments in Creador III, L.P. in 2016, and Creador IV, L.P. in 2018. As part of ADB’s investment, Creador will adopt gender initiatives to promote greater financial inclusion of women through investments.

Creador was established in 2011 and has since successfully launched five private equity funds, totaling approximately $2 billion in committed capital as of December 2021. It employs 50 professionals across five offices in developing Asia.

Dollar bonds

The ADB raised $3.5 billion from the issuance of a 5-year global benchmark bond in the United States dollar bond market to boost its Ordinary Capital Resources (OCR).

ADB plans to raise as much as $36 billion from the capital markets in 2022.

“We are pleased with the support from our investors across regions in our first global benchmark of the year,” said ADB Treasurer Pierre Van Peteghem. “With an orderbook of over $5 billion, we are able to raise $3.5 billion in additional resources as we assist our developing member countries in overcoming the health, social, and economic impact of the pandemic.”

The 5-year bond, with a coupon rate of 1.5 percent per annum payable semi-annually and a maturity date of January 20, 2027, was priced at 99.431 percent to yield 8.73 basis points over the 1.25 percent US Treasury notes due December 2026.

The transaction was lead-managed by BofA Securities, Citi, Deutsche Bank, and JP Morgan. A syndicate group was also formed consisting of CIBC Capital Markets, DBS, ING, and Scotiabank.

The issue achieved wide primary market distribution, with 22 percent of the bonds placed in Asia; 48 percent in Europe, Middle East, and Africa; and 30 percent in the Americas. By investor type, 44 percent of the bonds went to central banks and official institutions, 41 percent to banks, and 15 percent to fund managers and other types of investors.