IFC to back Mekong's latest Vietnam fund

Mekong's fifth vehicle targeting the local middle market was launched earlier this year with a hard cap of $250 million. AVCJ understands that Mitsui Group, a longstanding LP, is set to re-up alongside a significant number of existing backers.

IFC contributed $15 million to Mekong's prior fund, which closed in 2016 at $112 million with contributions from the likes of Canada's Sarona Asset Management and Dutch development finance institutions FMO. However, the latest fundraise has been characterized by less dependence on LPs in Western markets and greater interest from new Asian investors, especially in Japan and Korea.

The new fund, branded Mekong Enterprise Fund IV (MEF IV), will follow a similar strategy to its predecessors, making 10-12 transactions in a range of $8-30 million. Investments will be primarily significant minority stakes of 40-45%, although there will be some scope for selective buyout activity. IFC would be available to support larger deals through co-investment, according to a disclosure.

Investments will focus strongly on consumer sectors, especially retail, food and beverage, healthcare, education, and pharmaceuticals. Mekong's standout deal to date is electronics and appliances retailer Mobile World, which was initially invested by MEF II in 2007 and secured an overall return of 57x across multiple partial exits. Net proceeds from the investment were $199.4 million.

IFC has been an active investor in Vietnam since opening offices in both Hanoi and Ho Chi Minh City in 1997. Previous activity includes moves to invest VIB, a local bank that provides affordable housing financing, as well as VPBank, another lender focused on small to medium-sized enterprises. IFC has also partnered Vietnam's State Capital Investment Corporation to improve corporate governance in local businesses.

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• Topics
• Southeast Asia
• Fundraising
• Growth
• Vietnam
• Consumer
• Mekong Capital
• IFC