Singapore family office prefers private deals over public markets
Carbon Graphite Advisors sees huge opportunities in Asian private markets and expects to close more deals in early-stage start-ups as it grows its portfolio, said its chief executive Harsh Vardhan Rungta.
The Singapore-based single family office was set up in January 2020 by Graphite India, which is owned by the Kolkata-based K K Bangur family and is the world’s third largest maker of graphite electrodes used commonly in the production of steel.
Rungta joined Carbon Graphite in June this year from Bank of Singapore, where he had spent 14 years before leaving his managing director position. He declined to disclose the actual amount of the family office’s initial capital except that it is well above US$50 million.
Among its early investments are Impossible Foods, a plant-based alternative meat and dairy manufacturer, India-headquartered edutech company BYJU’s, drone maker DJI, and ride-hailing firm Grab.
“We'd like to keep businesses which are technology-driven and not capital intensive, which are easily scalable, and which are more consumer-driven businesses,” Rungta told AsianInvestor.
Most of these investments were made in the capacity of a limited partner as the family office was still learning the ropes, but it will expand its scope with a view to becoming a multi-family office one day, he said.
GOING PRIVATE
While Rungta believed there are still opportunities in the public markets in places like Singapore, Hong Kong, and China, where there are big-name listees and market liquidity, it is in the private markets where more future opportunities will be found.
According to a Bain & Co report in May, the Southeast Asia private equity market reached an all-time record high in deal value, at $25 billion, in 2021 — more than double the 2020 figures.
“Now for the private portfolio, we are gradually starting to scale it. Earlier, we were investing only in late-stage kinds of companies, which included really big prominent names, but gradually as we give it more form and function, we will go for earlier stage companies,” said Rungta.
He said Indonesia, Vietnam, and Thailand are home to many interesting companies in the innovation and technology space.
“I think anything that is consumer-facing, there are a lot of developments happening there,” he said, citing b2b platforms, e-commerce, and digital marketplaces as examples of start-ups that are mostly confined to the private markets.
“Therefore, as we move to some of the early-stage companies, I think Indonesia, Vietnam, and Thailand will definitely feature on the radar,” he said, adding that the family office has been meeting several venture capital firms to explore investment opportunities in the region.
“But it will definitely be on the private side. The public side doesn’t offer any compelling opportunities.”
SEARCH FOR VALUE
Carbon Graphite’s chief investment officer Saurabh Rathi, former executive director at the Bank of Singapore, said the family office will keep its options open to all asset classes and markets if the deal has strong value in its assessment.
“Money is actually blind. We follow that policy, then anywhere we can see values … it could be in the private equity space, listed equities, fixed income, or real estate,” he told AsianInvestor.
“We are quite agnostic about geography or the areas that we look at. We do look for value and we are open as long as the country where we invest in has good reliable rules,” he added.
He said that the Singapore Reits market is currently on his radar as the valuations have become attractive with the recent price corrections in response to rising interest rates.
“And of course, what’s happened in Europe and in the US … on average the Nasdaq is down about 30% and stocks will be down on average 50%,” he said, adding that China also holds pockets of opportunities, although the family office is not heavily invested there.
Carbon Graphite has also invested in logistics and warehousing facilities in the US and Europe, while also exploring data centres in Europe. It is in talks with several fund managers to seek opportunities in the infrastructure sector in the West, such as airports, toll roads, and railway networks that in Rathi’s opinion, are in dire need of upgrades when compared to the modern facilities in some of the fastest growing Asian economies.
“The US has to probably pump in a trillion dollars, maybe Europe also has to do the same. So as an investment strategy, we think there is a lot more money to be made there in terms of looking at these specific sectors because they have to spend a lot to compete with the Asian economies,” he said.
India meanwhile will not be Carbon Graphite’s main focus, despite the strong connections and expertise it has through its parent company.
“India is naturally a base for the family and there are already enough investments in India. So, we’re trying to rebalance … we want to build up in other areas,” said Rungta.