Singapore-based private equity firms Capital Square Partners (CSP) and Basil Technology Partners (BTP) have closed a $700-million fund, according to an announcement on Friday.
The transaction involved a hybrid of primary, secondary and continuation fund elements from Capital Square and Basil Technology’s previous funds, making it a complex and bespoke deal to execute. It is also said to be one of the largest funds dedicated to technology services in Asia.
The fund, dubbed “CSP Fund II”, raised capital from HarbourVest Partners, TPG NewQuest, Committed Advisors, and other institutional investors. HarbourVest and TPG NewQuest co-led the deal. HarbourVest led the structuring of the transaction. UBS Private Funds Group advised the transaction.
A total of 5 assets from Capital Square and Basil Technology were involved in the deal, said Sanjay Chakrabarty, founder and managing partner of Capital Square Partners.
He declined to provide specifics but said that some assets were acquired from Basil Technology’s Fund III, while others were partial stakes topped up from Capital Square’s Fund I. An additional primary cash injection was also added into the fund, with over $250 million set aside for new and follow-on investments.
“I’ve known Rajeev (Basil’s managing partner) for a decade or more…We were convinced that we could add value collectively because we complemented each other’s investment style. Both of us have been investing in the technology services space. While the Basil team focuses on earlier stage, we focus on more complex, control investments,” shared Chakrabarty in an interview with DealStreetAsia.
“We also felt across Basil and CSP that a number of our investments still had significant opportunities for growth, and we wanted to continue the momentum while adding to our platform’s capability to make new investments,” he explained.
There was no overlap between the LPs of both PE firms. Neither did the two firms share any investments in their respective portfolios, further underscoring the bespoke nature of this transaction.
“We really have to commend the UBS team for being creative when it comes to understanding what would work in the context of the parties involved,” said Chakrabarty, who now oversees $1.2 billion in committed capital and assets under management at Capital Square Partners.
“A cookie cutter approach wouldn’t have worked in this scenario. I think it also shows Asian investor openness to being creative with a relatively complex set of moving parts. Because at the end of the day, our job is to deliver value to investors, that’s our job,” he added.
CSP Fund II will have an 8-year fund life, with an expected exit timeline of 5-7 years for some of its existing assets. When it comes to primary deals, it aims to make another 3-4 investments with ticket sizes going at $25-150 million for control stakes in firms.
Some investment themes and sectors include emerging software as a service (SaaS), AI, data analytics, and other digital sub-sectors.