VinaCapital teams up on ASEAN fund

The Vietnam-focused firm has secured an anchor investor for a $300 million ASEAN fund being raised together with private equity shops in Thailand and Indonesia.

VinaCapital has launched an ASEAN private equity fund together with Thailand’s Finansa and Indonesian private equity shop Batavia Prosperindo and has secured Netherlands-based development bank FMO as an anchor investor, according to Don Lam, VinaCapital’s founding partner. 

The Asean Alliance Fund is targeting $300 million and has a mandate to invest in up to ten Southeast Asian countries. It will target domestic consumption sectors and will also consider investment in natural resources. 
 
FMO has pledged to commit up to $50 million, but the commitment cannot exceed 20 percent of the total fund, Lam said.

Lam told Private Equity International that the local experience the three private equity firms bring will provide the advantage of local knowledge within a regional fund. 

The fund will provide investment coverage for Southeast Asia, but through local knowledge that each of the private equity houses will bring

Don Lam,  founding partner, VinaCapital

“The rationale is that ASEAN funds are typically managed out of Hong Kong or Singapore. But ideally you would want a local team with local experience to close deals. So we have a fund that provides investment coverage for Southeast Asia, but through local knowledge that each of the private equity houses will bring.” 

Andy Ho, VinaCapital’s managing director, added: “We are experts in each of our markets. The alternative is to invest in an ASEAN fund and the GP sits in one place.” 

Another reason for the partnership is that the fund avoids single country risk, he added.

“In the last few years it became apparent that larger LPs like endowments are looking to put larger amounts of capital to work but are not interested in a single country fund risk,” Ho said.

Jakarta-based Batavia Prosperindo is an asset management firm with $1.2 billion under management. Finansa is part of Bangkok-based banking group Finansa and has raised several private equity funds for Thailand and Vietnam.

VinaCapital is an asset management and real estate consulting firm focused exclusively on Vietnam. It invests in private companies with capital raised through its public market funds. The firm also co-manages DFJ VinaCapital, a $32 million technology venture capital fund, with Draper Fisher Jurvetson.