Asia based private equity firm Navis Capital Partners seems to have stalled its plan to set up a Malaysia focused fund as the firm has made it clear that it is currently focusing on investing and executing its $1.5 billion main fund, the Navis Asia Fund VII.
“We did not announce a Malaysia focused fund, it is a myth…We are not thinking about raising the next Malaysia opportunity fund,” Navis’ Partner Edwin Fua told this website on the sidelines of DEALSTREETASIA‘s Private Equity-Venture Capital Summit held in Singapore last week.
Edwin said that the firm’s key focus right now is on the Navis Asia Fund VII that is in its second year. “We want to make sure we are able to deliver good returns for private equity and find the right amount of good investments that we can get into and also execute them. That will be the full focus for us,” he said.
There were reports earlier in May this year that Navis was in the midst of setting up a Malaysia focused fund and it may also be looking for an anchor investor for the same.
It may be mentioned here that Malaysia has faced a sluggish capital markets since 2015, partly due to a damp regional economy and also a lower investor confidence due to political instability that ensued from Malaysia finding a routine mention in international headlines for corruption charges on the government. Moreover, the deal-making for private equity funds was also seen shrinking in recent period.
In fact, in a recent interview with a local daily, Malaysia’s national private equity management firm Ekuinas CEO Syed Yasir Arafat Syed Abd Kadir had said, “It is a tough period. They (entrepreneurs) don’t want to be selling during a tough period because valuations are depressed. They will only do that if they are desperate.”
With reference to a Malaysia focused fund, Navis has a prior experience as it has worked with Ekuinas as an outsourced partner. Navis was one of the partners for Ekuinas‘ Malaysia Growth Opportunities Fund I (MGO1) in 2011.
“That fund we have fully invested. We are in the process of working and fully improving operations and its five years so it is time for us to start thinking about exits,” Edwin said.
However, Edwin also noted that from a country fund perspective, if the opportunities came along Navis would consider it. “With the Malaysian fund what we have done proves a lot that we can do it. It is partially about opportunities and partially about prioritization and I think our priority certainly is the main fund,” he pointed out.
Nevertheless, the firm is considering a country focused fund for other countries in the region but did not give any specific names.
Navis manages several private and public equity funds totaling $5 billion and has invested in over 70 companies since it was founded. It has invested in food processing, fast food/casual dining, industrial products, fast moving consumer goods, outdoor advertising, auto rentals, consultancy and professional services.
Asked if the firm had any favourite sector as it tends to invest in particular sectors more often , Edwin said, “we do not have a particular favourite sector. It really depends on where the cycle of the sector or where the country is. Off late we have definitely been investing more in consumer, manufacturing as well as healthcare.”
With regard to the consumer sector, he said that it may not be a bad time to do exit consumer sector as there is a lot of interest in that sector. “So if there is that amount of interest, it may be the right time,” he said.