Mekong Capital targets $150m for Fund III

Ho Chi Minh City-headquartered Mekong Capital has launched its third private equity fund, Mekong Enterprise Fund III, with a target of $150 million.

The firm expects to hold a final close on the fund within nine to 12 months, Thomas Lanyi, a director at Mekong Capital, told PEI Asia. Fund III is targeting three times as much as its predecessor, Mekong Enterprise Fund II, which closed on $50 million in 2006.

A report carried by Reuters said Fund III had received backing from the Asian Development Bank. Both predecessor funds also received commitments from the ADB, with the Fund II garnering $9 million from the institution.

Fund III will target investments in consumption-driven sectors, Lanyi said, adding that it will typically look to deploy $10 million to $15 million per deal.

In focusing on consumption plays, Mekong Capital is continuing the investment focus it began with Fund II. At the time of that fund close, the firm said its aim was to target companies involved in manufacturing, branding and distribution. It would focus on companies typically two to four years away from listing on one of Vietnam’s stock exchanges, taking minority positions of between 20 and 30 percent stakes, the firm said then.

So far, Fund II has invested in companies including Digiworld Corporation, an IT distribution company; Golden Gate Joint Stock Company, a chain of mushroom hotpot restaurants; and International Consumer Products, a diversified consumer goods company.

The firm’s first fund, Mekong Enterprise Fund I, closed on $18.5 million in 2002. It focused on export-oriented companies, made 10 investments and is now in its divestment phase.

Mekong Capital also manages The Vietnam Azalea Fund, launched in 2007, which targets minority investments in listed companies and pre-IPO plays. The Azalea Fund has $100 million in committed capital.

The firm, which also has an office in Hanoi, was founded in 2001 and employs over 45 people.

Siddharth Poddar contributed to this article.