IFC approves $60m commitment to Mekong Capital’s latest PE fund

The four Partners of Mekong Capital: Chad Ovel (L), Truong Dieu Le, Nguyen Thi Minh Giang and Chris Freund.

International Finance Corporation (IFC) has approved a total commitment of $60 million to Vietnam-focused private equity firm Mekong Capital’s latest fund.

The development finance institution had earlier disclosed it was mulling a proposal to invest up to $30 million in Mekong Enterprise Fund IV (MEF IV). We now understand that IFC has approved that proposal and committed an additional $30 million for co-investments with the PE fund.

IFC had earlier said that it would explore co-investments in deals that would be too big for MEF IV to invest in by itself, without divulging any details.

Mekong Capital is seeking to raise up to $250 million for MEF IV, its fifth fund overall and fourth in the Mekong Enterprise Fund series that focuses on investments in Vietnam’s consumer-related sectors.

The firm is yet to close its latest fund, according to industry sources.

An IFC spokesperson said that the organisation had committed $30 million to MEF IV in April 2020, with the condition that its commitment not exceed 20 per cent of the fund’s aggregate commitments.

“In addition, IFC also approved an allocation of US$30 million to a dedicated co-investment envelope for potential, future co-investments with the Fund. This is an internal approval and may or may not be deployed depending on the future co-investment opportunities arising from the Fund,” the spokesperson added.

IFC is not a new limited partner in Mekong Capital’s funds. The World Bank Group arm had earlier committed $15 million to MEF IV’s predecessor, which closed in 2016 at 112.5 million.

Meanwhile, the Asian Development Bank (ADB) is also considering a $20-million commitment to MEF IV.

In its disclosure, ADB said the investment in MEF IV aligned with its goals and country partnership strategy of promoting job creation and competitiveness, accelerating progress in gender equality and increasing the inclusiveness of infrastructure and service delivery, including improving access to quality education.

Half of Mekong Capital’s partners are currently women. It appointed its first two female partners — both in its investment team — in 2016. After one of them left, the firm promoted a female partner to oversee talent and corporate culture-related activities last year.

Apart from IFC and ADB, MEF IV is learnt to have obtained capital commitments from new LPs based in North Asia.

With a targeted size of more than twice its predecessor, MEF IV will write cheques between $8 million and 37.5 million per deal, about 50 per cent larger than its regular ticket sizes.

Mekong Capital has exited all investments made by its first three funds, including one launched to invest in privatised Vietnamese state-owned companies.

Editor’s note: This article was updated on July 15 to include IFC’s comment.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.