Samena Capital
Samena Capital is an Asia, India and MENA-focused alternative investments group, co-established in 2008 by Shirish Saraf and key partners from a cross section of industries and regions. This name was chosen due to the markets that Samena invests in. These are The INDIAN Subcontinent, Asia, Middle East and North Africa – a region collectively known as SAMENA. Also in ancient Buddhist script, Samena means "together" or "collective", which reflects the collective investment model the company is based on. The company and its subsidiaries employ 32 people in 3 locations (Hong Kong, London and Bahrain) worldwide, and has 47 shareholders.
Business model and structure
Samena Capital brings together entrepreneurs, business leaders and dealmakers from different industries across the SAMENA region, who collectively form the shareholders and the investment team.
The company uses these partnerships to obtain deals and to get insights into local markets and networks in the SAMENA region, where relationships often play an important role because the markets tend to be opaque. The shareholders are involved in the running of the business, meeting quarterly to exchange investment ideas, share views on business and explore possibilities of increasing economic trade between their respective markets.
Samena runs two regulated investment advisory subsidiaries, the first in Hong Kong that is licenced by the Hong Kong Securities and Futures Commission and London licenced by the Financial Services Authority. The company also has a Foreign Institutional Investor (FII) license from the Securities and Exchange Board of India, and an office in Bahrain that provides research and operational support. It has a permanent capital base of over US$90 million.
A recent article on Samena Capital in Business Times (Raffles Conversation) calls Saraf the Silk Road Dealmaker. It quotes him as saying, "We tend to be conservative. We don't tend to do leverage. We don't tend to do shorting or buying exotic derivatives. We do the simple thing. We buy into a good company and hold it for three to five years before selling it," he says. "We are partners. We help companies grow their business in a different market - for example, if an Indian company wants to go into the Middle East."
An article by Asian Venture Capital Journal says, " Operating partners now form the backbone of most private equity firms, in a variety of different guises. Samena Capital's take on this concept recognizes the importance of relationships."
History and overview
Samena Capital was set up in 2008 to take advantage of the cross-border investment opportunities arising out of the dislocation in global financial markets, and the emergence of the Asian, Indian and Middle Eastern countries as the growth markets of the future, even as the developed countries of Europe and the USA are receding into a recession.
Samena's main business lines include asset management (through special situations investments, credit market opportunities and direct investments/projects) and hedge fund seeding. Through its special situations funds, it invests in companies that have the ability to go across markets (within the SAMENA region) and capitalise on cross border opportunities. The Samena Special Situations Funds apply a hybrid private equity structure to public equity investing, and focus on operational enhancement of the companies they invest in. No leverage is used in these investments.
In 2009, Samena Capital partnered with Hong Kong's Argyle Street Management to invest in the rapidly evolving credit markets in the SAMENA countries. In 2011, Geneva-based banking group Reyl & Cie entered into a joint venture with Samena Capital via its seeding arm, Samena Asia Managers (SAM). The joint venture aims to combine Reyl and Cie's asset management and distribution expertise in Europe with Samena Capital's product expertise and network of people in the Asian, Indian and Middle East markets. It is likely to result in several future collaborations.
Samena's assets under management have grown significantly over the last three years to over US650 million, and are expected to cross US$1 billion once the second flagship fund closes in mid-2012.
Key people
Shirish Saraf is the vice chairman and CEO of Samena Capital. Prior to Samena, he was a co-founder and managing director of Abraaj Capital, one of the largest emerging markets-focused, global private equity firms with over US$6 billion in assets under management.
V-Nee YEH is the chairman of Samena Capital. V Nee is a member of the Executive Council of the Government of the Hong Kong Special Administrative Region 1, the co-founder and honorary chairman of Value Partners Group, and a board member of the Columbia University Endowment. Known as an "astute investor and entrepreneur".
Other shareholders of Samena Capital come from a cross-section of geographies and industries, with interests ranging from oil and gas sector, to banking and insurance, engineering and construction, education, and finance and asset management sector.
A few key shareholders are:
Asia
Pansy Ho and Daisy Ho, CEO and CFO, respectively, of Shun Tak Holdings, one of the largest conglomerates in Hong Kong with a focus on transportation, property, hospitality and investments.
Richard Elman, executive chairman and founder of Hong Kong's Noble Group.
India
Atul Punj, chairman & founder of India-based Punj Lloyd, a diversified US$1.8 billion conglomerate providing engineering and construction services in energy and infrastructure. He was awarded the First Generation Entrepreneur Of The Year at the CNBC-TV18 India Business Leader Awards in 2009. He is a founding shareholder of Samena Capital.
Rana Talwar, managing partner and founding chairman of Sabre Capital, and former global group CEO of Standard Chartered Plc and Standard Chartered Bank Worldwide.
Shyam Sunder Bhartia 2 and Hari Bhartia, chairman and co-chairman of Jubilant Life Sciences, one of the largest players in India's pharmaceuticals industry, as well as former executives of the Confederation of Indian Industry.
These three men are leading entrepreneurs of India.
US and Europe
Capricorn Investment Group located in California.
Gratian Anda, chairman and CEO of IHAG Holding, one of the largest Swiss family owned groups with interests in financial services, aviation, private equity, hotels and real estate.
Middle East
H.H. Sheikh Nahayan Bin Mubarak Al Nahayan, Minister of higher education and scientific research for Abu Dhabi, United Arab Emirates. He is also a member of the Al Nahayan family, one of the six ruling families of the UAE.
H.E. Sheikh Nawaf Nasser Bin Khaled Al Thani, chairman and CEO of Nasser Bin Khaled Holding, Qatar's leading conglomerate with a focus on construction, industrial services, oil and gas, telecom and civil engineering. He belongs to Qatar's royal family, the House of Thani and is a prominent member of the Qatari Businessmen's Association.
Kamal Bahamdan, co-founder and CEO of Safanad, and ex CEO of Bahamdan Group, a well-known global investment holding company with investing and operating platforms in telecom, education, infrastructure and retail across the MENA region. Seen as a young global leader, he is also partner and co-founder of the BV Group of companies, an international investment firm based in Washington, D.C.
Investment team
The Samena's investment team comprises portfolio managers and executives with experience across regions, including Pan Asia, Greater China, Japan, Korea, South Asia, MENA, India and Europe. Besides V-Nee YEH and Shirish Saraf, it includes members such as:
Ramiz Hasan, founder of Japan-focused hedge fund Invicta and a founding shareholder of Samena Capital.
Simon Wong, founder of GC Capital.
Ekaterina Sharashidze, former Minister of Economic Development of Georgia.
Main activities
Samena's primary business is asset management, covering special situations, credit markets and hedge fund seeding/bespoke products:
Special situations
The flagship Samena Special Situations Fund (SSSF I) was launched in August 2008, raising almost US$200 million amidst what was one of the most challenging capital raising environments in history. The five-year closed ended fund with a private equity structure, seeks opportunities in listed companies in the SAMENA region that have stable mature businesses with a strong management and technical knowhow, enabling them to take advantage of cross border opportunities.
The fund is reported to have fully exited seven and partially exited two out of the 19 investments it has made so far. It had also repaid 20% of its capital to investors by April 2011. Some of the most profitable investments the fund made were in Eicher Motors and Voltamp Transformers in India, Rubicon Offshore International, CSE Global in Singapore and Renaissance Services in Oman.
As a follow up to SSSF I, the company launched Samena Special Situations Fund II, which had an initial closing of US$315.5 million in June 2011. The fund will reportedly be finally closed at around US$700 million the second half of 2012. With a seven year closed-ended structure, this fund has an investment strategy similar to its predecessor, but with an added emphasis on private placement and co-investment opportunities.
The fund's investment strategy is based on a non-leveraged, hybrid investment model, consisting of two distinct portfolios: core investments that form the strategic portfolio, and the more tactical non-core investments that are held for trading or re-sale.
With the growth of its special situations business, Samena is understood to be seeking co-investment opportunities projects and direct investments, which are likely to be of a strategic or pre-IPO nature across a range of industries and geographies.
Credit and Fixed Income markets
In November 2009, Samena Capital entered into a joint venture with Hong Kong-based Argyle Street Management to form Samena ASM Investment Management. The JV manages the Samena ASM Asia Bond Fund, which invests in the emerging opportunities in the credit markets in the SAMENA region. Since inception in February 2010, the fund was nominated for the AsiaHedge Annual Awards 2011 in the "Best Fixed Income, High Yield and Distressed Fund" award category. The JV also manages other advisory mandates and managed accounts.
ASM is a specialist Asian hedge fund manager with a focus on special situations and distressed investing, and assets under management of US$1 billion.
Hedge fund seeding, managed accounts and bespoke products
To take advantage of the consolidation of the asset management industry during the global financial crisis of 2008, Samena Capital acquired an Asian hedge fund seeding platform from Vision Investment Management in May 2009. The platform has since then been renamed Samena Asia Managers (SAM), and runs the Samena Angel Fund with approximately US$100 million in AUM. The fund provides seed capital to early stage, Asia-focused hedge funds and/or invests in niche hedge funds. One of the most successful hedge funds it has seeded/accelerated is Chicago-based Phalanx Capital. The firm won the "Best Multi Strategy Fund" award from AsiaHedge in 2009 and was nominated in this category again in 2010.
In April 2011, Reyl & Cie, one of the leading Swiss banking and asset management groups, decided to partner with Samena Capital in a joint venture that combined SAM's hedge fund seeding business with Reyl and Cie's wealth and asset management expertise. While the JV is technically with SAM from the Samena side, the collaboration is expected to be firm-wide given the complimentary skills between Reyl & Cie, and expand beyond seeding funds.
The JV will allow Samena to leverage on Reyl and Cie's mutual fund management and European distribution to create bespoke products for mature European clients, while allowing Reyl and Cie to develop a footprint in the Asian and rest of SAMENA markets.