Private equity firm TPG eyes increased business in PH

LEADING global private equity firm TPG Capital is looking to scale up its investments in the Philippines following earlier deals to invest in a Davao-based rural bank and in a big mass housing developer.

“Growth rates in the Philippines have been very attractive and provides macroeconomic base to look into opportunities,” said Ganendran Sarvananthan, partner and managing director at TPG Capital.

The Philippine economy grew by 6.9 percent year-on-year in the first quarter, outpacing China and most other Asian neighbors, on the back of spending ahead of the May elections.

In an interview following the signing of TPG’s deal to buy 40 percent of One Network Bank (ONB) through middle market and growth equity platform TPG Growth, Sarvananthan said the company was looking for investments across the region and that investing in the Philippines was part of the strategy.

In 2014, TPG was also one of the cornerstone investors that supported the stock market debut of housing developer 8990 Holdings.

The TPG executive, who is part of the Southeast Asian team, said TPG favored financial services, healthcare, consumer retail segments and digital and new technology segments.

Asked whether he was worried about the transition to a new political leadership in the Philippines, Sarvananthan said that having a long-term investing horizon, TPG knew how to ride through political cycles. He noted that even in Myanmar, TPG had invested in November last year around the national election period.

Talking about TPG’s entry in ONB as a partner of leading Philippine lender Banco de Oro Unibank, Sarvananthan said that while the rural and thrift banking concept in the Philippines was unique, some parallelism could be drawn from TPG’s other investee companies. He was referring to Indonesia’s Bank Tabungan Pensiunan Nasional (BTPN) and India’s Janalakshmi Financial Services Ltd. which both had reached out to the “unbanked” segment of the population.

“ONB has a base network with teachers and we are now working with our partner to develop the strategy on how we may grow that business beyond Mindanao as well as what are products we can add to it,” he said. However, he said the priority would be to get the regulatory approvals for this investment.

“We’ve always sort of tried to find differentiated investing and for us obviously , our first and foremost responsibility is draw investors to find investments that give good returns. But sometimes, good returns can also return doing good,” Sarvananthan said, citing TPG’s positive experience in BTPN and Janalakshmi.

TPG has also been happy with its investment in 8990 Holdings. “Since we invested in the company in 2014, net income has grown by more than 70 percent. There has been tremendous growth in the company we’re hopeful that company will (further) grow,” he said, citing strong demand for housing especially among first-time homebuyers.