Japan VC, Maybank back Southeast Asia fund

Japanese venture capital firm Japan Asia Investment Co and Malaysian bank Maybank are co-anchoring a private equity fund aimed at investment opportunities in five Southeast Asian countries.

Japan Asia Investment Co (JAIC), a Japanese venture capital firm with offices across Asia, is teaming up with Maybank, Malaysia’s largest bank, to co-sponsor a new Southeast Asian private equity fund registered in Malaysia’s tax haven Labuan. Both parties have agreed to contribute $10 million to the project. 

The Maybank-JAIC ASEAN Fund targets a final close on $50 million (€40.5 million) at the end of March 2007, one year after the fund’s official launch date, said Ichiro Kawada, director of Singapore-based JAIC Asia Holdings, a wholly owned subsidiary of Tokyo-headquartered JAIC.

So far, the fund has raised $37 million from investors that include Korean venture capital firm KTB Network, National Innovation Fund of Kazakhstan and a Malaysian government body, Koperasi Permodalan Felda, Kawada told PEO.

The fund is to be  jointly managed by JAIC Asia Holdings and Mayban Ventures, the private equity arm of Maybank. It will seek to invest in Malaysia, Singapore, Indonesia, Thailand and Vietnam. Up to 30 percent of the fund is designated for investments in Malaysia, and the remaining 70 percent will be invested across the four countries, which are all members of ASEAN.

The fund will provide mezzanine financing and invest in mid- to late-stage pre-IPO companies in the manufacturing, automotive, retail, plantation, biotechnology and IT sectors, Kawada said. Each investment will range from $3 million to $5 million.

It is not the first collaboration between Maybank and JAIC. The relationship between the two entities dates back to 1994 when they launched a private equity fund called Picarda. Among Picarda’s undertakings was an investment in retailer Jaya Jusco, which was subsequently exited via an IPO in Malaysia. 

On the partnership, Kawada said: “Maybank is the largest bank in Malaysia. The partnership leverages on our respective capabilities – Maybank on our regional VC network, and JAIC on Maybank’s access to investors.”

JAIC is the only Japanese venture capitalist that currently has a presence in Southeast Asia, with representatives based in Singapore, Indonesia, Malaysia and Thailand, Kawada said, adding that a presence in Vietnam would be added soon.

Established in 1981, JAIC started as a semi-government investment firm and became independent in 1989 before it was listed on Tokyo’s Jasdaq stock exchange in 1996. To date, it has managed $827 million. Last year the group acquired a textile business in Indonesia from Japanese consumer goods manufacturer Kanebo.

Mayban Ventures, which was set up in 1993, has thus far managed three funds with a total fund size of 272 million Malaysian ringgit ($74 million, €60 million).