Thai Prosperity Advisory Company Limited (TPA), Thailand-based investment advisory firm, plans to raise its third fund in the second quarter of 2015 with a target of $100 million, a top executive with the company said.
TPA is currently in talks with limited partners for its third buyout vehicle that will be called Thailand Indochina Private Equity Fund (TIPF), its investment director Krit Phunratanamala told DEALSTREETASIA. The fund life will be for eight years, while the investment period is four years.
“We are looking for opportunities to invest in Thailand, Indochina and the ASEAN countries. We will focus both on the Thai companies looking to expand abroad as well as foreign firms that would like to use Thailand as their base to invest in the region,” he said.
TIPE will target investment in three main sectors – renewable energy, preventive medical hospitality and food retail. It plans to be a significant minority shareholder in the targeted firms, with a holding size of between 10 per cent to 45 per cent stake in each.
“All the three sectors are on upward trend. We are interested in small-to medium-sized bio gas and biomass power plants, which have potential to scale up,” he said. “The medical hospitality is booming especially preventive and traditional medicine, while many of the food retail operators have high potential to grow in the regional market,” he added
TPA was established in 2003 as a joint-venture between the Government Pension Fund of Thailand and the Brunei Investment Agency with the initiative to capitalise on the knowledge and expertise of both institutions.
Specialising in equity investments, TPA has advised on transactions including raising capital for growth expansion, financial restructuring, as well as, buyouts. So far, TPA has advised on the strategies and investments of two funds, which are Thailand Prosperity Fund (TTPF-1) and Thailand Prosperity Fund II (TTPF II).
The $200-million TTPF-1 was launched in March 2003 and finished the investment period in 2007. Currently, it is in the final stage of divestment period, expecting to finish and close the fund in 2015. Some of the companies, the fund had invested in and also exited include, Nok Air (in 2011), Sahathai Steel Pipes Plc (in 2013) and Quality Houses Plc (in 2008).
TTPF II, worth 2.53 billion baht (approximately $77 million, today) was launched in Sep 2008 and finished the investment period in 2012. However, it has two more years for exiting its investment. Some of divested companies were, Efficient English Services (a franchise operator of Wall Street English in 2014), Biodegradable Packaging for Environment (in 2014), and Diamond Building Products (2012-14).
In February, Thailand’s the Securities and Exchange Commission (SEC) Board approved the restructuring of private equity (PE) firms as trusts or “PE trust”. This move is to help increase fund raising channels for businesses and also enhancing the use of trust for transactions in the capital market.