Sirius has first close for SME fund

The Singapore-based firm is raising a growth capital fund to invest in local SMEs, which other investors neglect.

Sirius Venture Consulting, a Singapore-focussed SME investor, has raised S$15 million ($11 million; €7 million) for the initial close of its second fund. The firm is targeting S$30 million and expects to complete fundraising by the end of June this year.

Sirius SME Growth Partners I will provide growth and expansion capital to small and medium enterprises based in Singapore. Eugene Wong, managing director of Sirius Venture Consulting, told PEO that the fund will invest in 10 to 12 businesses and commit between S$2-3 million per deal.

The capital raised so far has been entirely from high net worth individuals and private family offices, Wong added.

He said in a statement: “Equity investments in SMEs are few and far between. Most SMEs are not financed through equity but instead rely primarily on debt as their main source of financing. In our opinion, this is mainly due to a mismatch in expectations between investment firms and SMEs.”

He told PEO that “not many institutional funds invest in this space in Singapore, so there is an investment gap and as a result, there are opportunities,” especially considering the large number of SMEs in the country.

The firm noted that the number of SMEs is steadily increasing in Singapore and according to SPRING Singapore, a government agency responsible for promoting SMEs in the country, they accounted for 42 percent of Singapore’s S$210 billion GDP in 2006.

The firm is looking with interest at the consumer sector and in the areas of leisure and entertainment, said Wong, though its fund will not limit itself to any particular sectors.

Sirius’ first fund was raised in 2006 in partnership with SPRING Singapore. The S$20 million Sirius Angel Fund makes angel and early stage investments in Singapore-based companies and has deployed about 20 percent of its capital so far.

Prior to the launch of its first fund in 2006, the firm made proprietary investments in SMEs. Sirius was established in 2002.