CapAsia taps Japanese for infra fund

The investor roster for CapAsia's latest infrastructure fund includes Japan Bank for International Cooperation (JBIC) and the Bank of Tokyo-Mitsubishi UFJ (BTMU), each of which committed up to $25 million, contributing half of the $100 million first close reached in December. CapAsia ASEAN Infrastructure III, which launched last spring, is on track to close at or above its target of $350 million by year end. The hard cap is $500 million.

This isn't JBIC only foray into Southeast Asian infrastructure. The group has partnered with Mizuho Corporate Bank and Mizuho Bank to form the JPY16 billion ($183 million) Mizuho ASEAN PE Fund to support overseas acquisitions by Japanese small- and medium-sized enterprises.

"While domestic investments have been generating inadequate returns in a low-yield environment, institutional investors are starting to look outside the country," Johan Bastin, CEO of CapAsia, tells AVCJ. "They are focused initially on OECD markets but recently started exploring Southeast Asia due to favorable government policies. For BTMU and JBIC, our fund may provide a window on the infrastructure market in the region."

Other LPs in CapAsia's new vehicle include Bangkok Bank Public Company and Germany's Deutsche Investitions - und Entwicklungsgesellschaft (DEG), as well as CapAsia's parent company, Malaysia-based CIMB Group and The Rohatyn Group (TRG), which acquired a 60% in the business last year.

CapAsia will leverage its own networks to identify new projects in the power, renewable energy, transportation and telecom sectors across Southeaswt Asia. BTMU and other banks may provide financial instruments to support portfolio companies' expansion.

"There is a growing LP base in our region and Asia-based Investors contribute around three quarters of the corpus," Bastin adds. "Given the strong economic fundamentals and a growing amount of institutional capital to be deployed, we believe that Asia-based institutional investors will become an increasingly important category of LPs for private equity funds in the region."

The fund will focus on minority stakes with a sweet spot size of $30 million. Overall ticket sizes could reach $100-150 million through co-investments. The fund - which has a 10-year life and an investment period of five years - is targeting a net IRR of 15%.

"We think the best opportunities will be found in the mid-market space as this is the sector overlooked by many big strategic investors," Bastin says. "We are having on-the-ground teams in four core ASEAN markets and we are ready to work with entrepreneurs, especially those outside the capital cities."

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Fundraising
• Infrastructure
• Infrastructure
• Southeast Asia
• Infrastructure
• Fundraising