Beer — specifically Indian beer — is one of the latest and most interesting investments by U.S. hedge fund manager Och-Ziff Capital Management Group, New York. The megamanager, reportedly managing more than $14 billion, took a $50.6 million minority stake in mid-July in London-based Cobra Beer Ltd., according to a statement from the brewer.
According to a Cobra statement, $23.9 million of the Och-Ziff investment was used to redeem all of its convertible cumulative redeemable preference shares, which were due in 2007. After costs of $2.8 million, the remaining $23.9 million will be used to finance expansion plans in the U.K. and India and to expand its draught beer capacity in the U.K. The firm also intends to expand its brewing and distribution activities into South Africa and to start exporting its brews to other countries.
Och-Ziff officials, famous for their reluctance to speak to the press, did not return calls seeking more information about the investment in Cobra Beer. According to the Cobra statement, Och-Ziff provided its investment in the form of $46 million in unsecured loan notes from its OZ Sculptor Finance Ireland Funds that are managed by Och-Ziff Management Europe Ltd., London. An additional $4.6 million was raised by an issue of new ordinary shares to private and institutional investors.
Cobra Beer was founded in 1989 using student loans by Karan Bilimoria, a native of India, while was attending Cambridge University in England, according to the brewer's entertaining website, www.cobrabeer.com.