Editor’s note: This story was amended 10.10 am SGT Thursday after the companies issued an updated press statement that they are targeting to raise $500 million for the new fund and have so far committed $300 million to it.
Bahrain-based alternative asset manager Investcorp has partnered with China Resources and Fung Strategic Holdings Ltd to launch a $500-million private equity fund focused on food brands in Asia, especially China, Singapore, and greater Southeast Asia, according to a statement.
Investcorp, China Resources and Fung Investments have already committed $300 million of capital to the new fund, which will be jointly owned and managed by its three founding partners.
The investment platform will primarily focus on capturing the growth and market opportunities of China’s highly fragmented food sector, with China Resources being one of the world’s largest owners and distributors of food brands in Greater China.
Fung Strategic Holdings is also a major player in the global consumer goods supply chain through Fung Investments, the Hong Kong-based private investment arm of the families of Victor Fung and William Fung.
The fund seeks to build a diversified portfolio of investments to support fast-growing businesses with anticipated higher margins and defensive franchises. It also seeks to invest in premium brands in niche sectors, such as condiments, packaged food, and health snacks.
The launch of the Asia food brands-focused fund comes as China, one of the fund’s target market, remains the world’s largest and fastest-growing consumer market. The market is poised for further growth as Chinese millennials spend more on premium and healthier brands.
“We are investing not only in what we consider to be the world’s largest and fastest-growing consumer market, and in one of the most defensive sectors, but also in partnership with some of the most respected entities in China,” said Hazem Ben-Gacem, Co-CEO of Investcorp.
On Wednesday, Investcorp and Hong Kong-based China Everbright announced the combination of their China-focused investment teams to jointly manage a recently launched fund targeting the country’s tech startups.
The combined teams and investment committees of the two companies will manage the China Everbright New Economy Fund I. Investcorp had last year agreed to invest up to $150 million in the fund’s second round in a deal marking its first private equity investment in China.