Navis buys into Malaysian IT company(2)

The Southeast Asia-focused firm has made the fourth investment from its separate Malaysia growth fund.

Navis Capital Partners has bought a 54.8 percent stake in Malaysian information technology company Strateq from investment company Kencana Capital Assets, according to a firm statement.

The transaction size was in the range of $11 million – $14 million (MYR 35 million – MYR 45 million), according to Navis. 

Strateq operates in Malaysia’s IT services industry with expertise in several key verticals, such as oil & gas, data centres and healthcare.

The investment is the fourth from Navis’ Malaysian Growth Opportunity Fund I, which is separate from Navis’ main fund, explained Raj Ayadurai, who heads MGO I.
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The vehicle is slightly more than half invested, he said. Last year, investments included Malaysian cinema operator MCAT Box Office and private education services provider SEG International.

“The deal pipeline is looking good and this year we expect 2 – 3 more investments,” he added.

MGO I originated three years ago when the Malaysian government provided a tranche of money to selected fund managers, including Navis, who then raised their own third party capital. The purpose was to make minority and growth investments in promising Malaysian SMEs. 

Typical investment sizes from MGO I range from $5 million to $16 million (MYR 15 million to MYR 50 million). 

The fund closed on $75 million in 2010. A capital increase from the government and LPs last year brought the fund size to $97.4 million (MYR 302 million), Ayadurai said.

Navis expects to raise a second vehicle with the same goals. “We are considering different options if [the government] rewards another tranche of capital next year,” he said. “There will be an MGO II with the same strategy but we don’t know yet when and how it will be constructed.”