Soros starts second fund
INTERNATIONAL investor George Soros is teaming up with finance house Peregrine to establish a US$1 billion fund that will take equity stakes in infrastructure projects across Asia.
It is the second power fund Mr Soros has announced in less than a week. On Monday he was reported to be establishing a global power fund heavily biased towards Asia.
The new fund, to be named The Asian Infrastructure Fund, will be directed at power, telecommunications, and transport projects in countries across the region, with a particular emphasis on investments in China.
According to informed sources, Mr Soros's contribution to the $1 billion figure will be in the range of US$110 million to $330 million with the remainder being placed to European, Japanese and Middle Eastern investors.
The fund's managers are looking to have raised upwards of $400 million by April.
Mr Soros's involvement comes after his recent move to return $2.4 billion in earnings from his main Quantum fund to investors.
Mr Will Liley of Peregrine, managing director, of the fund said investment would be directed at equity stakes in infrastructure projects that could generate a risk adjusted rate of return in excess of 20 per cent.
The investments will be managed through offshore companies which he said provided ''enormous flexibility'' when compared to other shareholding structures.
Additional co-sponsors of the fund include the International Finance Corporation, which is the commercial arm of the World Bank, a US pension fund consultant named Frank Russell and the Asian Development bank (ADB).
Mr Liley said the ADB would be invaluable in making the right deals because of ''its unrivalled network of relationships at governmental level in the region.'' No country shall receive more than 25 per cent of the total fund size and no sector more than 50 per cent, although China may be an exception, he said.
Vietnam, now open to US investment, was high on the fund's agenda where Peregrine had forged close relationships with the Government as a result of its role advising the state power bureau in recent months, said Mr Liley.
Prospective investment targets have already been picked and Mr Liley thought he could place $300 million worth of investment within 30 days if it were required.