Mekong Capital Raises US$50Mln for New Fund

The fund management Mekong Capital has finished raising US$50 million for its new private equity fund, the Mekong Enterprise Fund 2, said the firm managing director Chris Freund.

 

This is the second fund Mekong Capital has set up following the first one, the Mekong Enterprise Fund 1, with investment capital of US$18.5 million.

 

“Although our first fund has been successful in terms of the growth rate of our companies and the achievements they have made, we believe the second fund is in an even stronger position due to the experience our team has developed,” Freund said.

 

The Mekong Enterprise Fund 2 had a very similar strategy to the previous fund, which would focus on investment in private companies in Vietnam, he said.

 

The fund will pour money in four or five enterprises each year with an average investment of US$3 million into a firm, he said.

 

“We plan to stay close to our core competence of helping companies make operational improvements and continuously strengthen their management teams.”

 

“We plan to focus more on companies selling to the domestic market as opposed to export markets,” he said.

 

The Mekong Enterprise Fund 2 will also invest in unlisted companies that at the time of original investment are typically about two to four years away from a listing on one of Vietnam’s stock exchanges.

 

The fund will work closely with invested firms to help them make improvements and prepare for a successful listing on a stock market.

 

The fund aims to make minority investments, usually representing 20-30 per cent, in well-managed, fast growing private companies. It will also consider opportunities to invest in buy-outs of private, equitized and foreign-owned companies, which are involved mainly in manufacturing, branding and distribution.

 

Investors in Mekong Enterprise Fund 2 are from the government-related financial institutions such as Asian Development Bank and Holland’s FMO, private sector institution, investment funds and families and individuals.