Fullerton reaches $100m first close on Thai PE fund
Singapore’s Fullerton Fund Management has hit a first close of USD 100m on its first Thai private equity strategy in partnership with KBank Private Banking, a division of local lender Kasikorn Bank.
Fullerton and KBank launched the vehicle alongside Hong Kong family office Hatton Equity Partners and Thailand’s Land & Houses Fund Management with a strong emphasis on attracting local backing.
Fullerton has referred to the fund as the first-ever Thailand-focused private equity strategy accessible to Thai investors in the form of a mutual fund. KBank, which has previously offered two private equity funds investing in international companies, framed the project as “Thailand’s first-ever Thai private equity fund,” in a statement in January.
The fund aims to capitalise on attractive post-pandemic valuations in 8-10 small to mid-market companies with exposure to Thailand’s long-term growth. It hopes to achieve multiples on invested capital (MOIC) of 2x and 20% IRR with seven-year holds. Initial deployments have been made.
Targets include family-owned businesses in transition and spinoffs from conglomerates and corporations, as well as businesses considered COVID-19-resilient and related to COVID-19 recovery. Retail, food, industrial and advanced manufacturing, education, IT, healthcare and medical services, and financial and business services are among the areas of interest.
Family-owned businesses account for 80% of Thailand’s GDP with combined wealth of around THB 30trn (USD 873bn). Tan Huck Khim, Fullerton’s head of alternatives, has identified these companies as looking toward alternative sources of funding, including private equity, in place of traditional bank loans, especially in the wake of COVID-19.
“With correlation between traditional asset classes breaking down, Fullerton has been strengthening its alternatives capabilities to meet rising investor interest and appetite in non-traditional segments,” Mark Yuen, chief business development officer at Fullerton, said in a statement.
“For Thai private equity, we will drive value creation for companies through well-honed strategies to grow their businesses, improve their balance sheets, as well as management quality, for downstream opportunities.”
Fullerton was established as a subsidiary of Temasek Holdings in 2003 and maintains offices in Shanghai, London, and Brunei. Assets under management amounted to USD 39.5bn as of end-March, of which USD 2.3bn is in alternatives.
The firm has deployed USD 886m as part of a primary private assets strategy since 2019, claiming a 27% IRR to date. Last month, its latest private equity fund-of-funds was tokenised using blockchain, enabling minimum commitments of USD 10,000.
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