Confirmed: Ongpin, Ashmore to part ways

The chairman of the upscale property firm says this is part of the usual 7-year investment cycle, not a result of conflict with the London-based private equity fund

CONTROVERSIAL. Businessman Roberto "Bobby" Ongpin confirms the end of his group's partnership with UK fund Ashmore in Alphaland. Photo by AFP

MANILA, Philippines – Controversial businessman Roberto “Bobby” Ongpin and London-based private equity fund Ashmore Group will be parting ways.

This is the case, at least, for upscale property firm Alphaland Corp, a joint venture between Ashmore, an emerging-markets fund manager, and the country’s 11th richest man.

Ongpin and Ashmore have yet to comment if similar arrangements have been reached for the other investments of Ashmore in the Philippines, including diversified conglomerate San Miguel Corp, legacy airline operator PAL Holdings, oil refiner and retainer Petron Corp, and other firms where Ongpin represents Ashmore.

“I will always be grateful to Ashmore for having backed me for the last 7 years. Without their financial backing and support, the projects of Alphaland, including such ‘jewels in the crown’ as Balesin Island Club, Makati Place, Alphaland Tower, Alphaland Marina Club and several other major projects would never have come into existence,” Ongpin said in his letter to the Inquirer and set to be published July 16.

Ongpin, chairman of Alphaland, forwarded this letter to Rappler when we asked him in an email about Inquirer‘s July 15 piece on the reported fight between him and an Ashmore official.

Ongpin, former trade minister of the late dictator Ferdinand Marcos, is currently in Balesin, Alphaland’s flagship island development, and is set to leave for business trips abroad in a few days.

“I do not deny that there were issues and disagreements between Ashmore and myself,” he wrote, stressing that the reported nasty email exchanges between him and the unnamed Ashmore official over whether Ashmore has a vote on Alphaland’s fund-raising plans were “at least 3 to 4 months old.”

“These issues between Ashmore and myself have been peacefully and amicably resolved,” he added. A reported shouting match between Ongpin and an Ashmore official has been making the rounds in finance and business circles.

These reports were rife around the time Ongpin was embroiled in legal issues with the government, including the Court of Appeals’s order to freeze Ongpin’s bank accounts in December 2012, as well as the word and legal wars with the Bangko Sentral ng Pilipinas (BSP), and the Anti Money Laundering Council (AMLC).

When he was involved in the alleged P660-million behest loans from state-run Development Bank of the Philippines (DBP) in 2009, he had said Ashmore had “summoned” him to London to explain these issues. 

New investor

Ongpin said the end of his business relationship with Ashmore is part of the usual 7-year investment cycle that private equity funds go through.

“People who understand the private equity fund business know that these funds normally have a 7-year life. The relationship between myself and Ashmore started in 2006 and is now nearing its 7-year life, which means that the invested funds need to be liquidated and returned to the investors in the fund,” he wrote.

“Ashmore made it clear to me that no more funds would be available from Ashmore for Alphaland. Thus, we went on to explore several possibilities whereby a third party or even myself would acquire the Ashmore investment in Alphaland.”

“A few weeks ago, an investment group, which for obvious reasons cannot be named at this time, agreed with Ashmore to buy the Ashmore stake in Alphaland. The price has been agreed, and they are now going through the final drafting of the various agreements that are required,” Ongpin added.

“Alphaland is not ‘losing’ its funding source (Ashmore), but is in fact gaining a new investor which will continue to support the Alphaland projects. My own belief is that, in fact, the new investor will be more aggressive in backing Alphaland projects because it will not be operating under any 7-year funding constraint,” he wrote.

Alphaland’s portfolio includes a range of high-end developments, including the 3-Tower Alphaland Makati Place, the P4-billlion members-only Balesin Island Club in Quezon province, the P2-billion Alphaland Marina Club that will have 300 berths for boats of all sizes, and the P10-billion, 500-hectare Boracay Gateway, which will be timed with San Miguel’s expansion of the Caticlan airport.

Shares of Alphaland resumed trading in March 2013 following a two-month-long trading suspension for failing to meet the 10% minimum public ownership rule, which is part of capital market reforms.

Ashmore investments

Ashmore at one time had about US$2 billion in investments in the Philippines, triggering talk that Ongpin was acting as a dummy for various controversial personalities in politics, including the Marcos family and former President Gloria Macapagal Arroyo.

Ongpin had repeatedly denied fronting for anyone.

After long years of hiatus, Ongpin became the public face of Ashmore in 2008, when the private equity fund purchased the strategic 40-percent stake of Saudi Arabia’s Aramco Overseas in Petron Corp, the country’s biggest oil retailer and refiner.

Ashmore would later buy and safekeep for a few weeks the other 40% shares in Petron owned by the Philippine government, then turned around and sold these to San Miguel Corp, which now controls the oil giant.

Ashmore and San Miguel, which was then starting to diversify from its traditional food and drinks business, would team up again in 2008 to buy the 27-percent stake of pension fund Government Service Insurance System (GSIS) in power retailer Manila Electric Company. – Rappler.com

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