Belt Road Capital Management (BRCM), a Mekong region-focused private equity firm, is targeting to raise up to $100 million for its second fund, according to a top executive with the firm.
“We have had significant interest from investors for a second Mekong-focused fund. We expect the size to be around $75-100 million,” BRCM’s CIO Alex Odom told DEALSTREETASIA.
Set up in 2017, the firm launched its first vehicle with a $50-million corpus. It has deployed around 60 per cent of the first fund into six companies across the region, including Digital Classifieds Group, Oway, WeRocket, Sabay Digital and most recently two Vietnamese companies Tima and LeFlair.
Odom said, BRCM will announce the seventh deal soon.
He commented: “We have seen a dramatic increase in interest and investment from APAC countries, particularly FDI flowing in from China under the Belt Road Initiative. This is likely to continue to fuel the appetite for a wide variety of investment into these markets which make it an exciting time for fund managers like us to bring in our expertise and local knowledge.”
Odom revealed that the portfolio companies had shown significant uplift in valuations as they were seeking new rounds of funding. Outsized returns were coming to fruition, he added, as the lack of investment capital and information asymmetry in these markets presented a unique opportunity.
The fund manager typically makes investments in the range of $2-7 million for minority stakes at Series A level onwards. Its six portfolio businesses are all tech companies.
Moving forward, BRCM will explore some larger private equity deals in real estate and infrastructure.
“We are now heavily exploring the real estate sector, at the moment focusing on opportunities first in Cambodia before expanding to other markets in the region,” said the CIO.
“The Mekong Region will continue its rapid expansion over the next 3-5 years as more young consumers come onboard in Vietnam, Cambodia, Myanmar and Laos. We believe the consumption and transaction trends will be increasingly digital in these markets and have structured our investments to take advantage of this movement,” said Odom, adding that there was an increasing convergence of venture capital and private equity investments, as nearly all companies these days utilise and rely upon technology.