Vietnam-focused private equity firm Mekong Capital plans a hard cap of $250 million for its fifth fund and expects to reach the target by early next year, DealStreetAsia has learnt.
The development was first reported by Private Equity International. We have independently verified the news from sources familiar with the firm.
The latest and largest vehicle in the Mekong Enterprise Fund (MEF) series is two times bigger than its immediate predecessor, the $112.5 million Mekong Enterprise Fund III that has so far announced nine investments.
It is understood that existing and past limited partners of the previous funds have returned to back its fifth fund called MEF IV, with participation from some new LPs in Japan and Korea. The fund manager is said to have hosted roadshows in Seoul, Tokyo and Hong Kong.
Chris Freund, Mekong Capital’s founder and general partner, told us in an earlier interview that Mekong Capital did not plan to do roadshows in the US or Europe, because he saw more and more investors now based in Asia.
With the double-down on committed capital, Mekong Capital is expected to write larger checks by around 50 per cent, bringing the investment size to the tune of $8-37.5 million.
In addition, there is a high possibility that MEF IV’s LPs will co-invest with it.
MEF III is currently the only active fund of the Ho Chi Minh City-based PE firm. Its Mekong Enterprise Fund II (MEF II) last August made a full exit from its last investment, Asia Chemicals Corporation, for a total consideration of $8.9 million, generating a gross return multiple of 2.6x and a gross IRR of 15.1 per cent.
Earlier, in January 2018, MEF II made a full exit from its investment in Mobile World Investment Joint Stock Company (MWG) at a returns multiple of 57x and IRR of 61.1 per cent, clocking one of the most successful investments in the industry in Asia.
In May this year, the PE firm announced two investments in pharmacy chain Pharmacity and Pizza 4P’s Corporation, both through MEF III.