Dymon targets Singapore mid-market PE

"We will be targeting small- and medium-sized enterprises (SMEs) for the most part," says Gerald Chiu, a partner at the firm. "The market seems underserved in terms of investments requiring equity checks of S$30-40 million ($25-32 million)."

The fund's mandate allows it to target larger deals across a broader geography - the ASEAN region - but mid-market Singapore is a good fit for Chiu, who previously worked for Navis in the city state. The team is looking to raise S$300 million and is already two thirds of the way there.

Dymon was set up by Danny Yong and Keith Tan in August 2008 as a macro hedge fund with $100 million in capital. Yong was previously CIO at Abax Global Capital - another investment firm offering both private equity and hedge fund strategies - and Dymon maintained economic ties to Abax until 2009, when it started accepting capital from outside investors.

"Danny is a macro guy and Keith is more of a company guy," says Chiu. "They wanted to do a hedge fund and a special situations fund but after Lehman collapsed they decided to focus on the hedge fund. Now, with $2.8 billion in assets, they thought the time was right for Keith to move forward with the original plan to do more company-focused investing."

He does not, therefore, see the move as part of any wider industry trend towards hybrid private equity and hedge fund managers. Last month SAIF Partners announced plans to launch a Greater China hedge fund, while the likes of The Rohatyn Group, DE Shaw and Symphony Financial Partners have long recognized the advantages of covering both territories.

Tan and Chiu are the main partners in the fund with Yong's involvement stretching no further than a seat on the investment committee. They expect to recruit more directors and junior analysts by the end of the year.

Temasek has come in as a cornerstone LP, contributing S$100 via Heliconia Capital Management, a subsidiary dedicated to the Singapore SME space. While the sovereign fund is generally interested in co-investing with the GPs it backs, the commitment has only one condition attached: the first S$200 million raised must be invested in Singapore-headquartered companies.

"That is fairly broadly defined," Chiu explains. "The companies concerned could have factories in China and subsidiaries in Malaysia, but they answer to a Singapore office."

DAPE is now fundraising and investing concurrently and there are deals in the pipeline. The oil and gas services industry - leveraging Singapore's emergence as a hub for large contractors - is a particular area of interest.

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• Topics
• Fundraising
• Southeast Asia
• Fundraising
• Hedge funds
• Singapore
• Southeast Asia