Indonesia-focused Falcon House Partners has closed its debut vehicle on $212.4 million, completing a fundraise that was “substantially oversubscribed”, according to a source with direct knowledge of the matter.
The country fund had nearly $300 million in demand but stopped slightly over its hardcap of $200 million, the source told Private Equity International.
This is a good example of bifurcation of the market. There is an appetite for first time funds, but it’s a flight to quality. Falcon House has one of the most credible teams in Indonesia
PEI's industry source
The firm used Campbell Lutyens as its placement agent.
Both Falcon House and Campbell Lutyens declined to comment on fundraising.
The debut fund was raised in a tough fundraising environment and attracted LPs largely because of the track record of the team, PEI's source said. Falcon House was founded in 2011 by ex-Lehman Brothers banker, Brian O'Connor and two partners, Glenn Yusuf, who used to head the Indonesian Bank Restructuring Agency and Samir Soota, former partner at Quvat Management and ex-head of EMP-Daiwa Capital Asia’s Southeast Asia private-equity fund.
“This is a good example of bifurcation of the market,” the source said. “There is an appetite for first time funds, but it’s a flight to quality. Falcon House has one of the most credible teams in Indonesia.”
LPs were a mix from the US, Europe and Asia and included fund of funds Emerald Hill, International Finance Corp, Swiss Investment Fund for Emerging Markets and FMO, according to PEI’s source. There were no Indonesian investors.
Falcon House Partners Indonesia Fund I was launched in November 2011 with a target of $200 million. It seeks to invest in mid-market domestic consumption businesses and aims for a deal size of $15 million – $25 million.
The firm already made its first investment last year when it reached a first close on $100 million, according to a second source with knowledge of the firm. It expects more investments by the end of 2013.
The fund has the unplanned advantage of being raised just before the devaluation of the Indonesian rupiah, which has fallen roughly 20 percent since the fund was launched. The differential should help the firm offset Indonesia’s relatively high valuations.
“To have dry powder in this market is a massive advantage,” PEI's source adds.