Asian investment specialist Fullerton successfully closed its first fundraising round for a $100 million Thailand direct private equity strategy.
The strategy targets small and medium-sized companies exposed to Thailand’s long-term growth, with the potential to capitalize on attractive post-Covid valuations, and aims to generate outsized returns of twice the MOIC and an IRR of 20% over the seven-year period of the strategy. .
“As the correlation between traditional asset classes plummets, Fullerton has bolstered its alternative capabilities to meet growing investor interest and appetite in non-traditional segments. For Thai private equity, we will drive the creating value for companies through well-rehearsed strategies to grow their businesses, improve their balance sheets, as well as the quality of management, for downstream opportunities,” said Mark Yuen, director of business development at Fullerton Fund. management.
Fullerton has partnered with KBank Private Banking, Hatton Equity Partners and Land and House Asset Management to launch the first-ever Thailand-focused private equity strategy available to Thai investors in the form of a mutual fund.
The strategy aims to invest in eight to twelve medium-sized companies in Thailand. The fund manager and team would manage these portfolio companies to achieve their profitability goals and target valuations. Ultimately, the strategy seeks to secure returns through the sale of the portfolio company or an IPO.
The Fullerton Thai Private Equity strategy aims to generate two-fold returns on invested capital (MOIC) and a gross internal rate of return (IRR) of 20% over the life of the seven-year strategy.
The strategy offers investors the opportunity to invest in transitioning Thai family businesses, conglomerate and corporate spin-offs, as well as Covid-resilient and Covid-recovery businesses. The strategy can target sectors such as retail, food industries, industrial and advanced manufacturing, education, information and technology, healthcare and medical services, financial and business services.
Family businesses in Thailand account for 75% of the Thai stock market, according to PwC’s 2019 Global Family Business Survey. These family businesses also contribute 80% of Thailand’s gross domestic product (GDP) and have a combined wealth of 30 trillion baht.
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