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Sagicor, Sygnus in private equity alliance

Published:Wednesday | February 12, 2020 | 12:00 AMNeville Graham/Business Reporter
Ike Johnson, executive vice president at Sygnus Capital.
Kevin Donaldson, CEO of Sagicor Investments Jamaica Limited.
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Newcomer Sygnus Capital and Sagicor Investments Jamaica have partnered to form a private equity firm that will be unveiled later tonight.

The new outfit, called Sygnus Deneb Investments Limited, marks the two companies’ first-time entry into the growing private equity market.

Sygnus now says the fundraising effort launched late last year was to meant capitalise the new joint venture. The partners will each own 50 per cent of the company, Sagicor Investments has contributed most of the start-up capital and will be co-manager of the joint venture, while Sygnus will be lead manager, says Ike Johnson, executive vice president with responsibility for private equity and real estate at Sygnus Capital.

The size of Sagicor’s capital contribution was not disclosed.

Sygnus, meanwhile, has been seeking US$25 million through a private placement that opened in December and is due to close on March 21 – all of which is to be invested in targeted companies over time.

“We didn’t make it public before now due to a need to adhere to non-disclosure agreement that we had with some of our investors,” said Ike Johnson, executive vice president with responsibility for private equity and real estate at Sygnus Capital.

He said Sygnus Deneb has already a stake in a tourist hot spot in the Dutch Caribbean, called Aruba Wine & , but did not disclose the details of the transaction.

The name Sygnus is an offtake of the Cygnus constellation, one of the most visible group of stars in the northern sky; and identity selected for the joint venture is a continuation of that theme.

“In looking for a name for our third alternative investment vehicle we settled on Deneb, which is the brightest star in the Cygnus constellation,” Johnson told the Financial Gleaner.

Sygnus Deneb is aiming for at least 20 per cent of the share capital of companies it targets for investment.

“We want to invest in companies that either generate stable cash flow or have the potential to do so in the short to medium term,” Johnson said.

As co-manager, Sagicor will assist in the management of portfolio companies once they are acquired, and will help to raise equity to do transactions, he said.

neville.graham@gleanerjm.com