Southeast Asia focused private equity investor The Asia Entreprenuer Legacy (TAEL) Partners is raising a $500 million co-investment fund, structured as an annex vehicle that will sit alongside the firm’s $700-million second fund TAEL TWO.
The PE firm is tapping existing and new pool of investors, limited partners, for the fundraise.
The new vehicle – TAEL TWO Co-investment Fund – is expected to hit its first close by end of this year, one of the firm’s three founders and its CEO and Managing Partner Michael Sng told DEALSTREETASIA in an interaction recently.
“After much dialogue with the LPs we have a consent to raise a co-investment fund…LPs who are coming in our co-investment fund get to invest in our co-investing assets. The new capital that we are going to raise will enable us to invest in other assets to complete the platform,” Sng said. The new fund will focus on education, healthcare, food and agriculture and consumer.
Headquartered in Singapore, the firm established itself in 2007 when three founding Principals, Michael Sng, Ati Sugiharti and Loong Mei Yin came together. The private equity player aims to be a preferred partner to ASEAN family controlled businesses.
It invests in minority and majority deals in growth firms with deal size ranging from $30 million to $50 million. As an investor, the firm is trying to ride on the region’s young population and a growing middle class, a key philosophy for many regional peers.
“There are a couple of trends that are very evident in Southeast Asia which shows a very strong young population in the countries that we are investing in — Vietnam, Philippines, Indonesia and Malaysia. That is one investment trend, we are capitalising on and the second is growing middle class. Because of that there is a huge demand for education, hospital, consumer and this is the investment focus that we have,” Sng noted.
TAEL TWO has currently deployed over two-thirds or 75 per cent of its capital trying to create sectoral platforms with assets throughout Southeast Asia. For instance, in areas of food and agriculture, the firm has created a platform that includes Vietnamese agriculture firm Pan Group where International Finance Corporation (IFC) has also invested.
The $700 million fund (TAEL TWO) follows TAEL ONE that came in 2007 where TAEL Partners had raised a total of $551 million from the LP base that has now grown to 17 investors who come from diverse geographical backgrounds and include family offices, institutional investors and others.
Many PE investors have launched region-focussed funds give Southeast Asia market potential with over 600 million population, growing income levels and a young population. For instance, Asean-focused Navis Capital Partners is set to raise its eighth fund which could be a little short of $2 billion.
US-based fund manager Asia Alternatives Management is also expecting to close its fifth vehicle at around $1.5 billion by October and the vehicle which focusing on Asia largely will also invest in Southeast Asia. Gobi Partners, a Shanghai-based venture capital firm, is raising $200 million ASEAN Growth Fund (Meranti) and did a first close in August this year.