Philippines-focused private equity firm Navegar on Wednesday announced the final close of its second fund with $197 million in total capital commitments, exceeding a $150 million target for the vehicle launched in June 2019.
Navegar II will focus on investments in established companies in the consumer and business services sectors in the Philippines, consistent with its fully deployed predecessor fund, which had a corpus of $120 million.
The new fund will mainly focus on investing growth capital in companies that are active in growth sectors such as food and beverages, BPO, tourism, healthcare, and education.
Managing partners Nori Poblador and Javier Infante earlier told DealStreetAsia that Fund II hit the initial target of $150 million in February.
The fund received commitments from development finance institutions and family offices, including $20 million from the International Finance Corporation, a member of the World Bank Group. Dutch development bank FMO also made a $20 million investment in the fund, which is expected to boost PE funding in a country where private capital is still scarce.
Sovereign wealth funds, pension funds, and high net worth individuals in Asia, Europe, and the United States also chipped in, according to Monument Group, the exclusive advisor and placement agent to Navegar on the raising of the new fund.
“We are very pleased with the results of this fundraise. The success of this effort is all the more notable given that our final close was held in the midst of the COVID-19 pandemic. We greatly appreciate the confidence and trust of our investors,” Poblador said.
The fund has already completed two investments. In May, Navegar led a $20 million Series B funding for Australian staff outsourcing services player Cloudstaff Modern Workforce.
Early this year, it invested $12 million in Great Deals E-commerce Corp, a local e-commerce enabler founded by Alibaba eFounders fellow Steve Sy.
“With this additional capital, we are well-positioned to continue supporting promising businesses in this dynamic market, partnering with founders and management teams to create long-term shareholder value,” Infante said.
Navegar’s current portfolio companies include The Bistro Group, a premium casual dining operator in the Philippines; Bo’s Coffee, a homegrown coffee chain; Bistronomia, an F&B group that operates premium Spanish restaurants, and Royale Cold Storage, a full-service local cold storage provider.
In 2018, the firm exited its investment in the US and Philippines-based outsourcing startup TaskUs, which was bought by Blackstone for a reported $250 million. The Philippine investor had invested $15 million in the startup in 2015.
US consulting firm Bain & Company said private equity deal value in Southeast Asia slipped to $12 billion in 2019 from $14 billion a year ago.
But the pandemic could change the situation in favour of countries such as the Philippines, as global firms seek to diversify supply chains and focus on business process outsourcing to cope with the economic decline, Alessandro Cannarsi, a partner at Bain, told BusinessWorld in June.
Other notable PE investments in the Philippines this year include KKR’s acquisition of about 11.9 per cent in listed power developer First Gen Corp for $192.2 million. Last year, the private equity giant also partnered with Singapore sovereign wealth fund GIC to acquire a 42.5 per cent stake in the hospital unit of Metro Pacific Investments Corp.
In April, Singapore-based private equity firm Archipelago Capital Partners announced raising up to $250 million for its latest fund – Archipelago Asia Focus Fund II – that will invest in small and midsized companies in Southeast Asia. Archipelago’s second fund will deploy 40-50 per cent of its corpus in companies operating in the Philippines.