Investcorp backs $500m Asia food fund

The platform – which claims to be the first in the region dedicated to investing in local food brands – will be jointly managed by the three founding partners. They have contributed an initial $300 million and plan to raise the balance from third-party investors.

The fund will primarily target deals in China and Southeast Asia with a view to capturing growth opportunities in fragmented food industries. Condiments, packaged foods and healthy snacks are among the areas of interest. The goal is to leverage key trends around the expected emergence of 120 million Chinese middle-class households over the next decade, as well as growing demand among Chinese millennials for premium and healthier brands, according to a statement.

The announcement follows a move by Investcorp to deepen its China exposure by combining its technology-focused investment team with that of China Everbright. The Bahrain-headquartered investment manager – which has ambitions to build out a $50 billion Asia portfolio over the next seven years – previously committed $150 million to Everbright’s $600 million New Economy Fund.

In China Resources and Fung Investments, it has once again picked partners with considerable sector experience. China Resources Group – parent of China Resources Capital Management, which is involved in the food fund – is a state-owned enterprise with considerable consumer exposure. Its assets include Snow, China’s leading beer brand. Fung Group has interests spanning consumer brands and supply chains. It is best known as the parent of Li & Fung, an Asia sourcing channel for many global brands.

“We are investing not only in what we consider to be the world’s largest and fastest-growing consumer market, and in one of the most defensive sectors, but also in partnership with some of the most respected entities in China. Together, I believe that we will set the foundation for what we hope will be one of the most successful investment platforms dedicated to Asian food brands,” said Hazen Ben-Gacem, co-CEO of Investcorp.

Consumer brands are a mainstay of many Asia private equity investment strategies, but few managers are solely devoted to the food and beverage space. Hosen Capital is currently in the market looking to raise $750 million for its fourth China food and agriculture fund, which targets the entire food industry supply chain. Food technology is also gaining traction, with Singapore-based VisVires New Protein one of several specialists in this area. It is seeking $150 million for its second fund.

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• Topics
• Greater China
• Growth
• Consumer
• Fundraising
• Southeast Asia
• China
• Asia
• Investcorp
• China Resources Capital