Tikehau backs Asia secondaries specialist Foundation PE

Foundation, which was established by Jason Sambanju, formerly co-head of Asia at Paul Capital and head of Asian private equity secondaries at Deutsche Bank, is looking to raise $250 million in total. It has one other anchor investor in the first close. The firm did not comment on fundraising, but confirmed the investment by Tikehau, which is part of a broader strategic partnership.

There are only three other established Asia-focused secondary players – AB Value Capital Partners, TR Capital, and NewQuest Capital Partners. Foundation is looking to differentiate itself by focusing solely on serving as an LP rather than pursuing direct deals as well. It targets GP-led fund restructurings, LP interests in existing funds, and other bespoke liquidity solutions for LPs.

“We think there is a market for a platform that exclusively works with GPs, rather than competing with them or sitting in an adversarial seat in terms of buying their positions,” said Sambanju. “At the same time, we think the mid-market is underserved. Plenty of global firms target deals of $75 million and above; there aren’t many people below that level. Asia is fundamentally a mid-cap market.”

Sambanju’s co-founder is Jeremy Foo, formerly a director at Navis Capital Partners. He joined in 2018, a year after Sambanju departed Deutsche Bank. More recent recruits include Kimberly Tong in Singapore, formerly of CDH Investments, Mumbai-based Alok Gupta, who previously led India for Headland Capital Partners, and Mingzhu Tang in Beijing. Sambanju and Foo are both in Singapore.

At Paul Capital, Sambanju was instrumental in the spinout of Bank of America Merrill Lynch’s Asia PE team and portfolio, which became NewQuest. Since then, there has been a gradual uptick in secondary activity in the region. The likes of LP tenders, spinouts, strip sales, preferred equity, renminbi- and rupee-to-US dollar transitions, and single-asset continuation vehicles have, to varying degrees, become more commonplace.

“Some of the deals done in the early part of the decade didn’t have great outcomes, which made people reluctant to put money into the space, but there was a post-NewQuest wave,” said Sambanju. “Maybe from 2014 onwards, it picked up. Before that, it was one deal a month. Now we see one every two weeks. When you start reviewing 20-30 deals per year, that’s when you think you can pick out the two or three you really want to do.”

Foundation focuses on China, India, and Southeast Asia. The goal is to complete two to three deals a year, writing equity checks in the $10-40 million range. While there is a preference to lead transactions, which means the transaction size sweet spot runs up to $100 million, the firm will selectively participate as a syndicate partner in larger deals.

For Tikehau, teaming up with Foundation represents an opportunity to continue its recent Asia expansion and enter a new market segment globally. The firm has EUR29.4 billion ($34.8 billion) in assets under management across private debt, real assets, private equity and capital markets strategies, as well as in multi-asset and special opportunities portfolios.

“This strategic partnership will allow Tikehau Capital to further develop its private equity offering in Asia, leveraging Foundation PE’s extensive footprint in China, India, and Southeast Asia. Foundation PE is an entrepreneur-led company and shares the same strategy of selectiveness and alignment of interests as Tikehau Capital,” said Jean-Baptiste Feat, co-CIO and co-head of Asia at Tikehau Investment Management.

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• Topics
• Secondaries
• Fundraising
• GPs
• LPs
• Secondaries
• Asia
• Foundation Private Equity
• Tikehau Capital