Navis raises $900m for Fund VIII, closes Fund VI continuation

The PE firm confirmed the two closings in an announcement. A source close to the situation told AVCJ that NewQuest Capital Partners led the investor group supporting the continuation fund, which saw more than half of Fund VI LPs exit their positions. A small number of investors in the continuation vehicle also made primary commitments to Fund VIII, a second source added.

Navis closed Fund VII in 2015 with $1.5 billion in commitments, adding a $200 million shariah-compliant vehicle to a main fundraise of approximately $1.3 billion. It launched Fund VIII two years ago, targeting $1.75 billion.

The mandate for the new fund is like that of its predecessor: backing growth companies in Southeast Asia, as well as Australia and New Zealand and Greater China, primarily by taking control positions. It includes a $150 million co-investment sidecar for Cambodia, Laos, Myanmar, and Vietnam.

There have already been several investments from Fund VIII, including a commitment of up to $100 million to a hospital roll-up in Malaysia and the acquisition of CIA First International School in Cambodia. The Navis statement also mentions food-related consumer goods deals. Towards the end of 2019, the firm bought a Malaysian durian exporter and Thailand-based condiments supplier.

The introduction of a continuation vehicle represents an increasingly well-worn track for private equity. GP-led deals accounted for more than half of $60 billion transacted globally by secondary investors last year, according to Lazard. Of the GP-led total, 38% went into single-asset continuation vehicles and 34% into multi-asset continuation vehicles.

The five companies Navis selected from its sixth fund – which closed at $1.2 billion in 2010 – share a common climate and sustainability theme. Each is expected to benefit from rising interest in businesses that create value in these areas, while contributing to a reduction in the carbon footprint of their activities.

The portfolio includes TES-Envirocorp, an electronic waste recycling specialist that is developing a global network of lithium-ion battery recycling facilities. Companies involved in plastic-free and locally sourced food retail and the low-carbon-footprint production of protein and industrial goods are also represented.

Asia PE fundraising continues to be challenged by COVID-19, with most LPs unable to conduct in-person due diligence. GPs received $125.9 billion in 2020, a five-year low, and $55.8 billion has been raised in 2021 to date. The climate is highly polarized as LPs favor familiar names. There were about 220 partial or final closes in the first half of 2021, less than half the total for the same period in 2019.

Southeast Asia-based private equity firms secured $6.5 billion in 2020, up from $4.1 billion the previous year, but the total includes $2.2 billion for fund-of-funds – most of which went to Axiom Asia. The venture capital portion has also become increasingly prominent in recent years. The running total for 2021, across all strategies, is $1.8 billion.

Creador recently reached a first close of $500 million on its fifth South and Southeast Asia-focused fund, which has a hard cap of $680 million. There have also been first closes of $100 million and $250 million, respectively, by KV Asia Capital and Tower Capital. Both are targeting $300 million – KV for its second fund and Tower for its first.

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• Topics
• Southeast Asia
• Fundraising
• Buyout
• Secondaries
• Australasia
• Greater China
• GPs
• Navis Management
• Fundraising
• NewQuest Capital Partners