VIDEO: Navis Capital Partners' Rodney Muse

"When we started the firm 16 years ago it was a bit of a black box. They wanted to get to know you as the person they would interface with," he says. "Today they want to meet all management, go through all investments - good and bad - understand your processes, and understand the regulatory regimes of the different markets in which you invest. It's a far more thorough and robust due diligence."

Muse sees this as a positive for Navis, which he describes as a "very transparent and well-structured firm." It is also a reflection of how the balance of power in the GP-LP relationship still lies with the LPs. In addition to more careful oversight, institutional players are looking for co-investment opportunities. Navis accommodates this demand to the extent it can, with a preference for bringing in particular LPs when they can help improve the return profile of a business through strategic participation.

The private equity firm closed its most recent fund at $1.3 billion and seeks buyout opportunities throughout the region, although there is a focus on Southeast Asia. Muse notes that Navis has been very active in Singapore, although it tends to investment in companies with a regional presence.

"We have been underweight Indonesia as a direct opportunity but we are always trying to get indirect exposure to that market," he says. "A Singapore holding company or regional business might have assets in Indonesia or sell its products in Indonesia. That is a way of getting lower risk and lower cost exposure to what we think is a very exciting market."

The private equity firm often helps portfolio companies expand into new markets, although this only happens when such a move improves financial performance or makes a business more relevant to potential acquirers.

"We see that a successful execution across multiple geographies makes a business more relevant to a global player," Muse says. "If we can put together something that is Australasia - Australia and parts of Asia - they will get both the benefits of the mature Australian markets but also the growth of the emerging or developing economies of Asia."

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• Topics
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• Southeast Asia
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