Private Equity

Driven by the government’s commitment to economic liberalisation, Pakistan is forecast to continue growing at around 7% per annum, exceeding the Asian average.  With one of the world’s most successful privatisation programmes, a pivotal geographic position in a fast-growing region and sustainable comparative cost advantages in key sectors, Pakistan offers many exciting investment opportunities to sophisticated private equity investors.

JS Group has a successful, long term track record of unearthing and successfully developing investment opportunities in Pakistan and has led several successful private equity investments. In 2006, JS Group launched JS Private Equity Fund I; Pakistan’s first private equity fund targeting high-quality expansion capital and buyout investment opportunities within sector-leading companies in Pakistan.

The Fund - JSPE Fund I

• Pakistan’s first private equity fund, focusing on expansion capital and buyout opportunities
• Tax efficient, structured as a Mauritian Limited Life Company
• Target size US$200 million, US$70 million first close completed
• First close investors include International Finance Corporation, SAMBA Financial Group, Global Investment House and DCD Group
• Sponsored by JS Group, investing US$20 million, with US$1 million from the Fund Partners
• Target returns 30-40% net of fees and expenses

JS Group – The Fund Sponsor

• One of Pakistan’s leading financial services groups
  • AA+ PACRA rated flagship investment company
  • Largest private sector asset management company
  • Best-capitalised, award winning equity brokerage business
  • Largest fixed income and currency brokerage businesses
  • Second largest shareholder in largest general and life insurer
  • Conventional and separate Islamic banking businesses
• A history of successful international partnerships
  • Allianz (insurance)
  • International Finance Corporation (asset management)
  • Experian (credit bureau)
  • Bear Stearns (investment banking)
• Pakistan’s largest and most successful private equity investor
  • 24 private equity investments over a 10+ year horizon
  • A partner team that has worked together for over 10 years and has a depth of experience across the private equity life cycle
  • A delivered US$ 10-year IRR of 55% on Pakistan private equity

Key reasons to invest in Pakistan

• Strong macroeconomic performance – 8.4% GDP growth in 2004/05, 6.6% in 2005/06 and 6-8% medium-term growth forecast by Asian Development and World Banks
• Improved credit position (S&P upgrade to B+, Moody’s upgrade to B2) with positive outlook
• Liberalisation, deregulation and privatisation in key economic sectors
• Pakistan’s strategically geographic position as a trading and energy bridge for Asia and the Middle East
• Comparative cost advantage and reduction in trade barriers
• Limited private equity competition due to local regulatory framework
• A well developed legal, reporting and corporate governance framework

Investment Strategy

• Control or significant minority stakes with strong contractual rights
• Established companies, privately held or PIPE investments
• An attractive pipeline of investments already in place
• Expansion capital: comparative cost advantage, pent up domestic demand, deregulating sectors
• Buyout capital: sector consolidations, family owned companies facing succession issues, privatised company spin offs, underperforming conglomerates
• Greenfield: very selectively for infrastructure bottlenecks