Mekong nets golden return with Vietnamese restaurant exit

The sale of the Golden Gate restaurant chain operator produced a 9.1x return

Mekong Capital has sold its investment in Vietnamese restaurant chain operator Golden Gate Joint Stock Company, netting a return multiple of 9.1x and a gross IRR of 45.1 percent, according to a statement from the firm.

Standard Chartered Private Equity, the buyout arm of global banking corporation Standard Chartered, announced today that it had acquired a minority stake in Golden Gate for $35 million. The investment was made from the firm’s balance sheet, an SCPE spokeswoman told Private Equity International.

SCPE declined to disclose the precise stake it acquired. Mekong Capital also declined to comment beyond the statement.

When Mekong Capital took on the business in 2008, Golden Gate had five restaurants. Today it operates 67 restaurants under 11 concepts across Vietnam, including hotpot restaurant chain Ashima, rotary express hotpot restaurant chain Kichi-Kichi and Japanese fast-food delivery concept iCook.

Mekong Capital invested in Golden Gate with capital from Mekong Enterprise Fund II, a $50 million fund which was raised in 2006. It is the second of four private equity funds managed by the firm and was used to make 10 investments, seven of which have been fully exited, according to Mekong.

The remaining investments include Asia Chemical Corp and Vietnam Australia International School. Mekong partially exited the third remaining investment, domestic mobile phone retailer MobileWorld, known locally as TheGioDiDong, in April, selling more than 5.6 million shares via an IPO to reap a 21.8x return on its original investment.

Mekong will be keen to return capital to investors as it is currently raising its fourth fund which has a target and hard-cap of $150 million. The firm’s third vehicle, the Vietnam Azalea Fund, focused on pre-IPO plays in the country. The fourth fund will invest in consumer businesses, a source with direct knowledge of the matter told PEI in April.

The investment in Golden Gate is SCPE’s first in Vietnam, and the latest addition to its extensive Southeast Asia portfolio, according to a statement from the firm. The investment will give SCPE two board seats, which will be taken up by Bert Kwan, the managing director and head of private equity in the ASEAN region at Standard Chartered, and Lee Tjen Chew, a private equity director at the firm.

In a statement, Golden Gate CEO Dao The Vinh said SCPE will support the business in maintaining “the rapid growth that Golden Gate has achieved recently.”

Last week SCPE made a $35 million investment to acquire a minority stake in Al Jazeera Agricultural Company, a poultry and chicken feed producer and distributor in Jordan, its first investment in the country and fifth in the Middle East and North Africa region overall.