SBI launches $125m Asia fund

SBI Holdings and Dutch development bank FMO have anchored an emerging Asia-focused financial services vehicle, taking the fund to a first close of $60m.

SBI Holdings and the Netherlands Development Finance Company (FMO) have anchored an emerging Asia private equity vehicle to invest in the financial sector, according to a joint company statement. 

SBI Ven Capital, based in Singapore, will manage the fund.

The fund is targeting between $100 million and $125 million, and has made a first close on $60 million, with most of the capital coming from its anchor LPs, according to Yujin Otsuka, investment manager at SBI Ven Capital.

When emerging countries [develop], the financial sector grows more quickly than the countries’ economies at first. So we’re trying to reach the FIG sector to capture that growth in emerging areas

Yujin Otsuka, investment manager, SBI Ven Capital

SBI plans to invest $5 million to $10 million in financial services businesses across emerging and frontier countries in Asia, focusing on India, Sri Lanka, Bangladesh, Indonesia, the Philippines, Thailand, Cambodia and Vietnam. 

There is no mandated geographical allocation, but Otsuka expects the amount invested in each geography to fit the size of the economy. 

“When emerging countries [develop], the financial sector grows more quickly than the countries’ economies at first. So we’re trying to reach the FIG [financial institutions group] sector to capture that growth in emerging areas,” Otsuka told Private Equity International

Commercial banks and insurance companies are a key area for the firm, he added. 

The fund was originally targeting $80 million, but increased its size after noting a lot of interest from investors. The vehicle expects to have mostly Asia-based LPs, but is also talking to some European investors. 

FMO’s contribution to the fund is valuable, Otsuka said. “FMO is a very credible development bank in the Netherlands and their contribution in the investments to the financial institutions as well is very [significant]. At SBI we wanted to partner with a company that has strong expertise in the financial area so it was a good fit for us.”

SBI Ven Capital is a Singapore-based GP owned by Japanese asset manager SBI Holdings. It manages two other private equity vehicles, the SBI Jefferies Asia Fund and the technology-focused SBI Mahindra Fund. SBI Holdings currently has JPY 530 billion (€3.9 billion; $537 billion) in assets under management, according to PEI’s Research & Analytics division.