Exclusive: Northstar lines up first close for Fund IV

The Southeast Asian firm has increased its target to over $1bn due to investor interest.

Singapore-based Northstar Group will make a first close on its latest private equity fund imminently, expecting the whole fund to be significantly oversubscribed, sources with direct knowledge of the matter have revealed to Private Equity International.  

The fund, which was originally targeting around $950 million to invest in Southeast Asia – with a strong focus on Indonesia, has raised its target to just over $1 billion due to strong demand from potential LPs.

Although no specific number has been revealed due to last minute discussions, Northstar Equity Partners IV will complete the first close in June at around 50 percent of the final corpus, PEI’s sources said.

The fund is also hard capped at just over $1 billion and expects a high-percentage of re-ups from existing investors, which include long-standing partner the Government of Singapore Investment Corporation.

Northstar declined to comment on fundraising.

The firm launched the fund, its fourth private equity vehicle, in February this year and expects to make a final close by the end of the year.

The fund will likely be substantially oversubscribed, one industry source believes, despite investors holding back from the region after Indonesia’s macroeconomic difficulties hampered fundraising and dealflow. Sources have said that while the interest in Indonesia has declined recently, the interest in Northstar’s latest vehicle is actually higher than when it was last in the fundraising market.

In 2013, investors had flooded Southeast Asia, keen to get exposure to Asia’s latest most popular market.

Southeast Asia-focused funds, most of which cite Indonesia as their main investment destinations, raised $2.5 billion in 2013, a 232 percent increase on the $755 million raised by equivalent funds in 2012, according to data from PEI’s Research & Analytics division.

However, during the first five months of 2014, just $150 million of closed commitments has been raised by Southeast Asia vehicles.

The Northstar Group was co-founded by Goldman Sachs veteran Patrick Walujo and Glenn Sugita, former vice president at Goldman’s Indonesian partner Bahana Securities.

Northstar says it has invested over $2 billion with its co-investors across Southeast Asia and has a 40-strong investment team. It is currently investing from Northstar Equity Partners III, which is an $820 million vehicle and about two-thirds deployed.