Singapore's Growtheum Capital closes debut fund at $567m, a tad below target

Singapore's Growtheum Capital closes debut fund at $567m, a tad below target

REUTERS/Gary Cameron

Singapore-based private equity firm Growtheum Capital Partners has secured the final close of its debut fund at $567 million, just shy of its initial target of $600-800 million.

The fund close takes place amid a trying time for fund managers globally, who are receiving a cold reception from limited partners (LPs) who have turned cautious since US public markets reversed last year. This has led to fund close delays and smaller fund sizes for many general partners (GPs) in Asia and around the world.

Growtheum’s managing partner Amit Kunal acknowledged that its initial target of $600 million was overly optimistic given the market conditions. “We were aggressively stupid when we started because we had never raised funds in our career,” shared Kunal in a candid interview with DealStreetAsia. 

“We are experienced dealmakers. Our last investment was our 35th or 36th. We have invested one-to-one in a company without a partner. (All) that comes naturally to us, but fundraising did not,” Kunal shared.

Fundraising gets even tougher for first-time funds, which have to start building LP relationships from scratch. Growtheum Capital is led by former GIC investors Amit Kunal and Choo Koon Po, who left the Singaporean sovereign wealth fund to start the private equity firm in 2020.

Despite missing the target, the $567 million secured was still substantial, said Kunal.

“Think about it, we were a first-time fund. We had no placement advisor, no referrals coming from LPs or GPs, and the toughest fundraising environment in our lifetime that we have all witnessed. Yet this is the largest ever fundraise for a first-time fund for India and Southeast Asia,” he added.

Growtheum SEA Fund I, which will invest in Southeast Asia and India, raised from around 40 LPs including institutional investors such as the World Bank’s International Finance Corporation (IFC) and the Asian Development Bank (ADB). The firm has also deployed in a series of deals.

Growtheum has invested in Indonesia’s e-grocery platform AlloFresh, digital lender Bank Allo, hospital group Mitra Plumbon Healthcare Group, and Vietnamese dairy producer International Dairy Products (IDP), among others.

Kunal added that the firm deploys cheque sizes of between $50-350 million. It avoids smaller deals, but can be opportunistically flexible with its cheques.

“Our investment decisions are driven by whether a business fits our strategy and can be developed into a market leader. For mature businesses, if they can’t provide a 20-30% return, they’re not in consideration. Size doesn’t matter as much as the potential for growth. Our focus is taking small- to mid-size companies and scaling them up, a strategy that remains consistent in our investment journey,” said Kunal.

On exit routes, Kunal noted that in a moderately favourable to positive IPO climate, the viability of IPO exits could improve.

When assessing potential investments, Growtheum’s initial focus is on determining where they envision taking the company and the viable exit strategies at that point. Evaluating the alignment between their capabilities and the company’s growth path, as well as the availability of the IPO option, becomes the primary consideration.

Kristie Neo and Nguyen Thi Bich Ngoc contributed to this story.

Edited by: Pramod Mathew

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