Temasek-backed venture capital firm Vertex Ventures has divested its second Southeast Asian and Chinese funds for $400-500 million, according to several sources close to the development.
One source told DealStreetAsia that the stake was sold to Liechtenstein-based financial group LGT, in what is one of Southeast Asia’s earliest secondary transactions on a portfolio basis.
LGT Group, an active investor in the Asia-Pacific region, has over $240 billion in assets under management.
The deal is also understood to be a partial sale involving the direct transfer of stakes in nearly 10-12 companies, according to a separate source.
Evercore is said to be advising the transaction, according to one of the sources mentioned above.
Vertex Ventures’s second Southeast Asian fund had a corpus of $90 million from the 2014 vintage, while Vertex Ventures’s second undisclosed Chinese fund belonged to the 2011-2012 vintage.
Vertex Ventures’s first $90-million Southeast Asia fund, launched in 2010, was also fully divested around one to one-and-a-half years ago, according to one source. This is the same fund from which Vertex had reportedly invested in Singapore-based super app Grab, which is currently in talks with Altimeter SPAC to list in the US.
One source shared with DealStreetAsia that the transaction took place “quickly” during what should have been a tough year for exits due to the COVID-19 pandemic in 2020. The source pointed out that Vertex was successful [in the divestment] because of its institutional and disciplined approach to venture investing.
DealStreetAsia has reached out to LGT Group for comment. Vertex Ventures declined to comment for this story.
Secondary VC portfolio transactions are still rare in Southeast Asia, given the region’s nascent venture ecosystem.
However, a number of Southeast Asia’s oldest funds, such as the debut funds of Golden Gate Ventures, Monk’s Hill Ventures and Jungle Ventures, are approaching the end of their fund lives, which industry observers say will spur the need for extra liquidity and/or exits, if they find themselves under pressure to return capital to their limited partners (LPs).
Singapore-headquartered Vertex Holdings operates five early-stage funds globally. These include Vertex Ventures Israel, Vertex Ventures USA, Vertex Ventures China, Vertex Ventures SEA & India, Vertex Ventures Healthcare, and a growth-stage fund called Vertex Growth.
Vertex Holdings was reported last month to have launched a third fund-of-funds vehicle with a target size of $800 million last month. The latest Vertex Master Fund III will deploy capital directly into Vertex’s network of six funds.
Vertex’s second master fund closed in December 2019 at $730 million, with Temasek as the anchor investor contributing about three-quarters of the total corpus. Other investors that participated in the fund included Japanese corporates Sumitomo Mitsui Banking Corp, Marubeni, ABeam Consulting and the Development Bank of Japan.