Vietnam-focused Danish private equity firm PENM Partners, which is in the market to raise its fifth fund, expects a bumpy road ahead in the aftermath of the novel coronavirus, according to a senior executive.
The firm is seeking to raise about $150 million for PENM V, the same as its predecessor, Hans Christian Jacobsen, managing partner of PENM Partners, told DealStreetAsia.
“We were supposed to raise the fund by mid this year. But the coronavirus has caused a lot of uncertainties, so the end of this year or early next year would be more realistic,” he said.
“In Europe, China or Vietnam, investors are putting on hold to see how it will work out.” PENM Partners’s limited partners (LPs) include Danish pension fund PKA.
The general partner also expects the investment scene in Vietnam to normalise in three to six months, given the Southeast Asian country has not been affected as much as countries such as China or Italy.
PENM V will continue to commit to PE investments in Vietnam focused on the consumer theme, Jacobsen added.
Besides making new investments, the fifth fund will look at opportunities to double down on existing portfolio companies. Jacobsen said the firm’s current vehicle, PENM IV, could still make two or three more investments.
When it comes to sealing new deals, Jacobsen asserted that valuations remain unrealistic. “Especially in the present situation, many companies have seen sales down by up to 60 per cent,” he said.
PENM Partners has invested in Vietnamese businesses across the fields of manufacturing, agriculture, foods, retail and services, such as steel major Hoa Phat Group, diversified company Masan Group, Taseco Airs, GTN Foods, International Consumer Products and Loc Troi.
It has also realised almost 20 investments. The firm disposed of its past portfolio through both IPO and sales to strategic investors.
In 2017, it scored a big exit from Masan to American PE giant KKR for $100 million. Eight years earlier, PENM Partners, then known as BankInvest, and TPG Growth had announced a $50-million co-investment in Masan, in which TPG Growth poured an amount of $35 million.
“In the past, we sold [our portfolio companies] to European and US investors as well as Vietnamese investors. Now, there is a lot of interest from Japan and South Korea. The exit environment is reasonable,” said Jacobsen.