US-based fund secures 5% stake in Metro Pacific

MANILA, Philippines - A Washington-based investment manager focusing on emerging markets has secured a minority stake in infrastructure conglomerate Metro Pacific Investments Corp. (MPIC).

In a regulatory filing, MPIC said Cartica Management Llc has secured 5.02 percent or 1.306 billion shares of the company.

The transaction is “an investment position taken in connection with Cartica’s ordinary course of business in investment management,” MPIC said.

In the past two months, Cartica, which was founded in 2008, has been buying around 21 million to 141 million shares in MPIC.

“Cartica is an emerging markets fund manager employing an active ownership strategy to achieve superior returns for investors,” the company said in its web site.

Its recent acquisitions and private placements include Skyware Radio Systems GmbH, India’s TTK Prestige Ltd. and The Ratnakar Bank Ltd.

“Cartica manages a series of fund vehicles all investing together in a concentrated, long-only portfolio of equity securities of publicly-traded companies,” the fund manager said. Cartica manages money for large US pensions like Calpers and the State of Wisconsin Investment Board.

“Cartica acquires significant stakes, usually representing two to five percent of the outstanding shares of a portfolio company,” it added.

Its investment team previously worked together in the senior leadership of the World Bank Group’s International Finance Corp., which focuses on investing in emerging markets like the Philippines.

For its part, MPIC is one of the top conglomerates in the Philippines focusing in the industrial sector.

MPIC’s core income, which strips off non-recurring items, jumped 14 percent to P3.9 billion in the first half from P3.5 billion a year ago due to better performance of all operating units.

Its reported net income attributable to shareholders of the parent firm rose seven percent to P3.7 billion from P3.4 billion last year while consolidated revenues gained 12 percent to P15.3 billion in the first half from P13.6 billion.

MPIC is into power distribution (Manila Electric Co.), water utility (Maynilad Water Services Inc.), toll roads (Metro Pacific Tollways Corp.) and healthcare (MPIC Hospitals Group).

The conglomerate expects its core net income to hit P7 billion this year. Its core earnings jumped 28 percent to P6.5 billion last year.

MPIC is the local unit of Hong Kong’s First Pacific Co. Ltd., allotted P36.3 billion in capital expenditures this year.