Archipelago targets $250m for second Southeast Asia fund
Archipelago Capital Partners is seeking $250 million for its second Southeast Asia fund and has received a proposed $25 million LP commitment from the International Finance Corporation (IFC).
The private equity firm closed its debut vehicle at $75 million in May 2019, short of the $150 million target. Speaking to AVCJ at the time, CEO Jovasky Pang said he decided on a quick close in order to focus on investments, with some of the commitments moved to the second fund. “We will finish full deployment this year, and then we will shift the rest to the next fund, which will be bigger,” he said.
The IFC contribution cannot exceed 20% of the total size of the fund, according to a filing. It expects Archipelago Asia Focus Fund II to make 7-10 investments in established small and medium-sized enterprises. These will primarily be control deals in the consumer, financial services, and industrials and logistics sectors. Businesses based in the Philippines will account for 40-50% of the corpus, with the rest deployed in Indonesia, Thailand, and Malaysia.
Pang founded Archipelago in 2016 alongside Eng Khim Lim, formerly of Khazanah Nasional, and Kiat Chan, who has served as executive vice president of investments at Singapore Post. The three previously worked together at McKinsey & Company and have experience at various regional banks.
The firm previously identified consumer, healthcare, financial services, and niche industrial segments as its core focus. Buyout deals from Fund I include the purchase of Indonesian chemicals producer Timuraya Tunggal, while Philippines-based One Network Bank is among the growth investments.
Other recent fundraising activity in Southeast Asia includes Northstar Group reaching a first close of approximately $260 million on its fifth vehicle, which has an overall target of $800 million. Meanwhile, prior to the emergence of the coronavirus pandemic, Caldera Pacific secured $250 million in commitments for its debut fund, with France-based investor Argenthal coming in as an anchor LP. The hard cap has been set at $350 million.
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