Low-profile British firm emerges as surprise TikTok bidder
Centricus Asset Management has placed several offers to buy TikTok’s US operations directly to Zhang Yiming, the chief executive of its parent company Bytedance, according to a report in the Wall Street Journal. The report claims the bid is being positioned as a backup deal if the Chinese or US governments reject a partnership for the viral video app with American software business Oracle.
While Centricus may have a low profile, its founders are heavyweights in banking, with years of experience navigating the worlds of sovereign wealth funds and Chinese investors.
They played a crucial role in the formation of SoftBank’s $US100 billion ($139 billion) Vision Fund, introducing the Japanese conglomerate to investors and helping seal a $US45 billion deal with the Saudi sovereign wealth fund.
Michele Faissola, one of the company’s three founding partners and a former colleague of Vision Fund head Rajeev Misra, left the fund after helping to set up SoftBank’s bumper investment vehicle. It has been reported that his role as an adviser to the Qatari royal family may have upset SoftBank’s Saudi investors.
Last year, he was sentenced to almost five years in prison by an Italian court over allegations that he helped Banca Monte dei Paschi di Siena to hide millions of euros of losses.
He has denied the charges and his lawyer has indicated that he plans to appeal the sentence.
Co-founder Dalinc Ariburnu, another former colleague of Misra, left his role of co-head of global fixed income, currency and commodities sales at Goldman Sachs in 2016 to start Centricus. Two years later, his west London home, which includes ane enormous basement and artworks by Antony Gormley and David Hockney, was photographed for an article in The Times. David Beckham once visited the house to view Ariburnu’s custom-built kitchen island, the largest of its kind in the country.
Nizar Al-Bassam, the fund’s third co-founder, sued Deutsche Bank in 2018 in a bid to reclaim $US4.7 million in bonuses he claimed had been withheld. The case was settled that year.
The fund is part of a growing number of new investment vehicles set up by former bankers who are seeking to expand into the world of technology and take advantage of spiralling valuations.
“The recent wave of special-purpose acquisition company formations in the US has shown there’s still a lot of public market capital that wants even more tech sector exposure,” said one industry insider. “Especially in London, there’s unmet demand and no shortage of bankers that want to fill the gap.”
The fund has already had some investments in tech, including leading a $US 7m round into Virtualitics, an American start-up which lets people examine data using virtual reality headsets.
Centricus also led a $US16 million funding round last year into Exyn Technologies, which produces drones that can explore underground caves.
The strategy behind the Centricus bid is clear. If rising trade tensions between the US and China scupper TikTok’s current deal with Oracle, then Centricus’s bid may be the only offer left on the table.
If it does manage to convince TikTok executives that it’s the only remaining option, the resulting deal would catapult the London fund into becoming one of the world’s most significant technology investors.
It would expose the fund, set up in 2016 as FAB Partners after the names of the founding partners, to the ongoing and unpredictable trade war.
Insiders acknowledge that Centricus’s bid has little chance of success.
But the plucky British fund is hoping that the ongoing trade war might deliver it a mammoth windfall.
Telegraph, London
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