Falcon House closes second Indonesia fund at $400m

The fund launched in the third quarter of 2015 with a target of $300 million and reached a first close of approximately $200 million 12 months ago. LPs include university endowments and charitable foundations, fund-of-funds, and development finance institutions (DFIs). The International Finance Corporation (IFC) said in October 2015 that it was considering a commitment of $25 million.

According to a source familiar with the GP, despite the end of the commodities boom, US tapering policies and a general emerging markets downturn contributing to a difficult 2014-2015, long-term faith in the Indonesian consumer remained. "More than half the country is under 30, it's at the sweet spot of the McKinsey s-curve in terms of urbanization, and people spend a relatively large amount of their disposal income," the source added.

Confidence has been further boosted by the election of President Joko Widodo in 2014 and a generally strong policy agenda since then. The government has rolled out 14 stimulus packages since late 2015, with initiatives ranging from administrative measures, such as speeding up licensing procedures, to tax cuts for small business, to the removal of foreign ownership caps in many industries.

IFC was also an LP in Falcon House's first fund alongside Germany's DEG and the Netherland's FMO. That vehicle closed at $212 million in October 2013, with DFIs accounting for 30% of the corpus. The fund spent nearly two years in the market, becoming oversubscribed towards the end of the process and beating its $200 million target.

Fund II will follow the same strategy as its predecessor, sticking rigidly to middle market consumer sector transactions of $30-40 million. Past investments have spanned healthcare, food and beverage and food production.

Falcon House was set up by Glenn Yusuf, who ran the Indonesian Bank Restructuring Agency following the Asian financial crisis; Brian O'Connor, formerly a senior executive at Lehman Brothers; and Samir Soota, previously managing director of South and South East Asia at EMP Global.

They were one of a host of groups looking to raise debut Indonesia funds around 2011 when private equity interest in the market was at a peak. Only Falcon House and Capsquare Asia Partners managed to breakthrough. The latter raised approximately $80 million and is understood to be back in the market with its second fund.

 

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• Topics
• Southeast Asia
• Fundraising
• Growth
• Consumer
• Indonesia
• Falcon House
• GPs