TAEL Partners to hold first close of co-investment fund – exclusive

South-East Asia-focused manager, The Asian Entrepreneur Legacy (TAEL) Partners, is set to hold a first close of over $100 million for its co-investment vehicle, TAEL Two Co-investment (COIN), by April, Private Equity International has learned.

TAEL COIN was launched in late 2017 with an original target of $300 million and a green-shoe option of up to $500 million. It will invest alongside the firm’s second fund, TAEL Two, a 2013-vintage vehicle that closed on $700 million.

With this capital raise, the firm has essentially opted to set up a co-investment vehicle for a fund that closed over four years ago, instead of launching a third follow-on blind pool commingled vehicle, the usual strategy for most investment managers.

PEI understands TAEL Two is almost fully deployed.

Michael Sng, founding partner of TAEL told PEI that the firm’s intention behind this move was two-fold.

“First, it was a response to new investors who wanted to invest in our existing portfolio companies instead of a fresh TAEL Three fund with a long J-curve and 7 to 10-year time horizon,” he explained.

“We also wanted to capitalise on the strong potentials of four sectors – healthcare, education, consumer and food and agriculture – which are beneficiaries of the strong growth of the middle-class population in ASEAN.”

Sng highlighted that with additional capital raised from TAEL COIN, the firm could enhance the value of existing investments and boost the respective platforms. It will also justify the recruitment of senior experienced professionals in each of the platforms, who will form the management teams.

The firm expects almost half of the 17 LPs from TAEL Two to participate in the co-investment vehicle, Sng said. TAEL’s investor base includes three sovereign wealth funds, pension funds, family office and financial institutions from Asia, Europe and the US.

The William Penn Foundation has backed TAEL Two, according to PEI data.

The firm’s existing LPs are supportive of the co-investment fund, Sng said, as the capital raise will enhance the value of the platforms and achieve higher exit multiples for its investments.

A final close for TAEL COIN is expected by the third quarter of 2018.

TAEL typically investments between $30 million and $50 million per deal. The firm has invested in Vietnamese food company PAN and taxi company Vinasun.

TAEL has over $1 billion of assets under management. It makes investments in Singapore, Malaysia, Indonesia, Thailand, Philippines and Vietnam.