US$100-m private equity fund
Sygnus, Sagicor Investments join forces on alternative investment ventureFriday, February 14, 2020
BY KELLARAY MILES
Sygnus has partnered with Sagicor Investments to launch a US$100-million private equity fund designed to deepen the real estate and financial powerhouse's hold on the Caribbean's alternative investment market.
The fund, named Sygnus Deneb, is the company's third alternative investment venture as it continues to expand its reach in the non-traditional financing space, dedicating funds for private equity, private credit, and real estate.
“In three years we have built the Caribbean's number one alternative investment platform and now have over 100 million in dedicated alternative capital,” Dr Ike Johnson, executive vice-president with responsibility for private equity and real estate at Sygnus, told guests at the official launch Wednesday evening inside the Audi showroom on Oxford Road in St Andrew on the outskirts of New Kingston, the capital city's financial district.
Playing on the actual meaning of Deneb — the brightest star in the Cygnus constellation — Johnson described the new entity as a transformative financing vehicle that will provide equity capital to companies at the growth or mature stages of their business life cycle.
“Through the businesses we will be able to unlock capital to drive expansion at a much faster rate. Companies partnering with Sygnus will also benefit from our deep financial expertise and expansive regional network,” he said.
Johnson noted that with the Caribbean becoming a hotbed for investment, Sygnus Deneb is currently exploring opportunities in Jamaica, The Bahamas, Dominican Republic, Trinidad and Tobago, and the Dutch Caribbean, which, he said, represents a pipeline in excess of US$120 million — four times the amount it is seeking to raise in the first phase.
“We want to raise an initial US$30 million for Sygnus Deneb, and with a target of over three to five years, a fund size of $100 million. The targeted return on equity on a sustainable basis is estimated at 18 per cent with an intention to pay out up to 85 per cent of the earnings of the entity in dividends,” he told the captive audience.
He noted that with several industries throughout the Caribbean showing great opportunities for investment in the areas of energy, tourism, distribution trade, financial services, manufacturing and hospitality, the company has already moved to test-run the efficiency of this venture in the region.
“For this entity we look to invest in portfolio companies with a minimum investment of US$2 million. We've already executed on our first transaction. We've acquired a significant shareholding in one of the top hospitality entities in Aruba [Wine and Dine] and we deployed US$8 million in this investment,” Johnson shared.
President and chief executive officer of Sygnus Berisford Grey added that while the venture will focus on private equity the company has also embarked on a journey that will change how capital is accessed as it creates value for shareholders, investors and businesses across the region.
“When Sygnus started three years ago our vision, which remains the same to date, was to unlock capital using creative financing solutions to drive the velocity of economic growth across the region. Sygnus is committed to deepening the accessibility to capital in the Caribbean by developing a robust alternative investments ecosystem through which businesses can access private credit, private equity and real estate financing,” he said.
Speaking to the partnership, and from his company's position, CEO of Sagicor Investments Kevin Donaldson lauded the new fund as an innovative financial solution that will be beneficial to the region and its development.
“As we launch this latest initiative, we're driven by the desire to make our country and region achieve more, be more and allow our citizens to be able to achieve their goals,” Donaldson said. “Sygnus Deneb is another step in allowing our investors and the region to reach for the highest and become numbered among the best places to do business.”
Through a robust and mature board led by Jason Abrahams, along with a solid partnership with Sagicor Investments, Sygnus expects this latest offering of private equity financing to deliver strong results and yield great returns for investors.
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