Vietnam’s Mekong Capital hits final close of fourth fund at $112m, fails to meet $150m target

Ho Chi Minh City-based private equity firm Mekong Capital has announced the final close of its fourth fund – Mekong Enterprise Fund III Limited Partnership (MEF III) – at $122 million.  The final close of this vehicle was lower than the PE firm’s initial expectation of raising $150 million.

Last year, it raised $87.4 million for this vehicle.

The fund targets investments in the region of $8-15 million while it also considers minority and buyout options, the company said. The fund is already making new investments. Mekong Capital typically holds 25-35 per cent of the invested companies, its CEO Chris Freund had told DEALSTREETASIA in an earlier interaction.

With a 10-year span, Mekong Capital expects to make a total of approximately 12 investments during the first three years of MEF III’s operations.

“The primary investment objective of MEF III is to achieve a high internal rate of return by investing in Vietnamese consumer-driven businesses such as retail, restaurants, consumer products, and consumer services. It may also invest in companies involved in the convergence between online and offline, especially in the retail space,” Mekong Capital said in a statement.

Established in 2001, the four funds of the company have been dedicated to Vietnamese businesses. Mekong Capital gets involved in the management of its investees and has played an important role in the success of many of these firms.

It has completed 29 private equity investments with 17 full exits and 3 partial exits.  Mekong Capital’s current and past investee companies are typically among the market leading companies in Vietnam, such as mobile device retailer MobileWorld, Phu Nhuan Jewelry, pharmaceutical firm Traphaco, restaurant chain operator Golden Gate, Masan Consumer and International Consumer Products.

The two most notable exits made by Mekong Capital were the nine-fold return from the $2.6 million investment in Golden Gate and partial divestment from Mobile World, which yielded a 21x return. The firm won the PEI Operational Excellence 2015 prize for its Golden Gate deal.

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