Asian investment specialist Fullerton raises $100m first close for Thai PE strategy

Asian investment specialist Fullerton has successfully closed its first round of fundraising for a Thai direct private equity strategy at $100 million.

The strategy targets small to mid-market companies with exposure to Thailand’s long-term growth, with potential to capitalise on attractive post-Covid valuations, and aims to deliver outsized returns of two times MOIC and 20% IRR over the strategy’s term of seven years.

“With correlation between traditional asset classes breaking down, Fullerton has been strengthening its alternatives capabilities to meet rising investor interest and appetite in non-traditional segments. For Thai private equity, we will drive value creation for companies through well-honed strategies to grow their businesses, improve their balance sheets, as well as management quality, for downstream opportunities,” said Mark Yuen, Chief Business Development Officer, 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 accessible to Thai investors in the form of mutual fund.

The strategy seeks to invest in eight to 12 mid-sized companies in Thailand. The fund manager and team would manage these portfolio companies to reach their target profitability goals and valuations. Eventually, the strategy seeks to secure returns through a sale of the portfolio company or an IPO.

The Fullerton Thai Private Equity strategy is targeting to deliver returns of two times multiple of invested capital (MOIC) and 20% gross internal rate of return (IRR) over the strategy’s life of seven years.

The strategy offers investors the opportunity to invest in Thai family-owned businesses in transition, spin offs from conglomerates and corporations, plus Covid-resilient and Covid-recovery businesses. The strategy may target sectors such as consumer retail, food industries, industrial and advanced manufacturing, education, information and tech, healthcare and medical services, financial and business services.

Family-owned businesses in Thailand make up 75% of Thailand’s stock exchange, according to PwC’s 2019 Global Family Business Survey. These family-owned businesses also contribute to 80% of Thailand’s Gross Domestic Product (GDP) and have a combined wealth of THB30 trillion.