Morgan Stanley collects $440m for debut Thai fund

Bangkok Bank, International Finance Corporation and DEG are investors in North Haven Thai Private Equity.

Morgan Stanley Private Equity Asia, the investment platform of Morgan Stanley Investment Management, has raised $440 million against a $300 million target for its debut private equity fund focused on Thailand.

MSPEA began fundraising for North Haven Thai Private Equity in late 2016 and has received capital commitments of up to $25 million from International Finance Corporation and another $25 million from German development finance institution DEG, according to disclosures from the investors.

Bangkok Bank, one of the largest commercial banks in Thailand and South-East Asia with more than $100 billion under management, is an anchor investor in the fund, according to the DEG statement. It is unclear how much the Bangkok Bank invested in the fund.

Capital raised for the fund will be invested across consumer-focused companies with significant operations in Thailand. The vehicle will serve as a strategic platform for Thai portfolio companies’ expansion into Cambodia, Laos, Myanmar and Vietnam. Environmental, social and governance factors will be considered in identifying investments for the fund, MSPEA noted in the statement. A typical ticket size is between $30 million and $50 million. The firm has deployed $40 million from the fund, in skincare company Do Day Dream and diaper maker DSG, a source with knowledge of the matter told Private Equity International.

Prior to setting up the Thai-focused fund, MSPEA had raised pan-Asia focused funds including the 2014-vintage North Haven Private Equity Asia IV that closed on $1.7 billion and the 2007-vintage Fund III that collected $1.5 billion. The firm is seeking $2 billion for its fifth offering, according to a report in the Wall Street Journal.

South-East Asia is the next big opportunity in Asia-Pacific due to its vibrant and digitally native youth, Chris Lerner, global partner and head of Asia at Eaton Partners, told Private Equity International‘s Asia roundtable in September.

“I think that is going to create new opportunities for companies that can identify and serve the needs of that customer segment operating across those different markets,” Lerner said.

Among South-East Asia-focused funds in market include Kuala Lumpur-based COPE Private Equity, which is targeting around $70 million; Creador, which has a $500 million target for its Fund IV; and healthcare-focused Quadria Capital, which is eyeing a $500 million target for its fourth vehicle, according to PEI data.