Temasek-linked Fullerton Fund Management has raised $100 million in an initial closing as it builds its first Thai private equity (PE) strategy, according to an announcement.
The company said it has partnered with KBank Private Banking, Hatton Equity Partners and Land and Houses Fund Management to launch this first-ever Thailand-focused private equity strategy available to Thai investors in the form of mutual funds. shift.
The strategy will leverage KBank Private Banking’s proprietary network of capital markets and business owners in Thailand, and leverage Fullerton’s proprietary deal flow and industry network for investment ideas, the company said. Singapore-based asset management company.
Triphon Phumiwasana, business manager at KBank Private Banking, said his unit previously offered two private equity funds investing in international companies in 2019 and 2020, with the first fund generating around more than 60 percent.
Fullerton said its new Thai private equity program is in an advanced stage of raising capital, with initial deployments already made in underlying companies.
Fullerton Thai PE will invest in eight to 12 transitioning mid-sized Thai family businesses, conglomerate and corporate spin-offs, as well as Covid-resilient and Covid-recovery businesses.
The strategy will cover sectors such as retail, food, industrial and advanced manufacturing, education, information and technology, healthcare and medical services, financial and business services.
It aims to generate returns of 2x multiples and 20% gross IRR over the life of the seven-year strategy.
“Thailand’s investment market is deeply underserved by private equity relative to the size of the economy. These companies are looking for alternative funding sources like private equity in place of traditional bank loans as sources of funding, especially in the wake of Covid-19,” said Tan Huck Khim, Head of Alternatives at Fullerton Fund Management.
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 GDP and have a combined wealth of 30 trillion baht ($881 billion).
“With the breakdown of the correlation between traditional asset classes, Fullerton has strengthened its alternative capabilities to meet growing investor interest and appetite in non-traditional segments. For Thai private equity, we will boost 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,” added Mark Yuen, director of business development at Fullerton Fund Management . .
The Temasek-backed company invests in equities, fixed income, multi-assets, alternatives and cash management. Its assets under management (AUM) grew to $39.5 billion at the end of March 2022, including $2.3 billion in alternative investment commitments.
Fullerton’s core private asset strategy has deployed $886 million at the end of March 2022 and has generated an IRR of 27% since the program launched in 2019.