GT Capital Holdings Inc., the investment arm of the Ty family, is looking to invest $100 million to $200 million in prospective partners as part of moves to diversify its business portfolio and lessen its dependence on the banking and automotive industries.
In an interview, GT Capital Chief Financial Officer George Uy-Tioco, Jr., said, “We're in this situation now where we have strong performance of our business units, and the next question is what do we do next, what sectors do we want to invest in next?”
“What we're trying to do now is we're trying to finalize our investment plan and how we take GT capital to the future....We're in investment mode. We are in the process of looking for sectors and businesses that we can invest in to expand our portfolio,” he added.
Uy-Tioco noted that, “Because of their relative size, we're very heavy on financial services and automotive. So, what we're looking for is to diversify and potentially look at something else that can help balance the portfolio so that in situations where financial services might not do as well, then you have something else to balance it. Any particular sector.”
While the company has not yet identified any specific investment target, Uy-Tioco said, “There are active discussions in terms of potential opportunities, and we just have to sift through all of them and decide which makes sense.”
“I think it's fair to say that we would look to invest as much as maybe, on a regular basis, we'd like to look at investing anywhere from $100 to $200 million...
“Our priority would be to take a look at managing our Capex requirements as well as any capital required by our affiliates. And then, after that, whatever excess cash we have is available for investments or for other things,” he noted.
Uy-Tioco said GT Capital is interested in investing in under-penetrated and very fragmented industries that will give the firm “the kind of returns that we want, where we can make an impact, and that could contribute to the bottom line.”
The company is looking at sectors such as healthcare, renewable energy, and data centers because these are “very fragmented segments and the margins are very good; there's a need for it.”
He pointed out that target investments will not be in the gaming sector or any sector that may be considered a vice because “There is a morality aspect to it that we would prefer to avoid... it's just not something that we would like to take a look at.”
Affiliated or associated industries are going to be easier to invest in because GT Capital already has a specific knowledge in these industries and the company prefers to do this via acquisitions or partnerships although it is not ruling out greenfield investments.
“Partnerships is still the way to go. That's always been in our DNA our preference is to work with partners. We we cannot say that we have the expertise in all the sectors that we want to get into and that's where a partner becomes important. But we do have the financial capabilities and we have a local knowledge of how to be able to work with partners in the Philippine context,” Uy-Tioco explained.