In­vest­corp sets up $500m fund aim­ing for Asian food mar­ket deals

The National - News - - BUSINESS - ALKESH SHARMA

In­vest­corp, the Bahrain-based firm that counts Mubadala In­vest­ment Com­pany as its big­gest share­holder, launched a pri­vate eq­uity fund with Chi­nese part­ners tar­get­ing $500 mil­lion (Dh1.84bn) of deals in the Asian food in­dus­try.

It joined forces with sta­te­owned China Re­sources and Fung Strate­gic Hold­ings, a mem­ber of Hong Kong-based Fung In­vest­ments, to launch the fund, which will be the first ded­i­cated plat­form tar­get­ing Asia’s food in­dus­try. The fund will fo­cus on mar­kets in China, Sin­ga­pore and greater South East Asia, In­vest­corp said on Thurs­day.

“In­vest­corp has been ac­tively grow­ing our pres­ence in Asia as part of our strat­egy to ex­pand and di­ver­sify our global reach and of­fer­ings,” said Hazem Ben-Gacem, co-chief ex­ec­u­tive of In­vest­corp. “We are in­vest­ing not only in what we con­sider to be the world’s largest and fastest­grow­ing con­sumer mar­ket, and in one of the most de­fen­sive sec­tors, but also in part­ner­ship with some of the most re­spected en­ti­ties in China,” he added.

With 120 mil­lion Chi­nese house­holds set to be­come mid­dle-class con­sumers over the next decade, China of­fers huge po­ten­tial in do­mes­tic con­sump­tion growth, the com­pany said. This trend is sup­ported by Chi­nese mil­len­ni­als spend­ing more money seek­ing pre­mium and health­ier brands, it added.

The fund will sup­port fast-grow­ing busi­nesses with high mar­gins and also pre­mium brands in niche sec­tors such as condi­ments, pack­aged food and healthy snacks.

The three found­ing part­ners have al­ready signed an ini­tial fund­ing agree­ment of $300m and ex­pect to close the first deal within the next four to six months. A Reuters re­port said about a dozen in­vest­ments are ex­pected to be made over the next five years.

In­vest­corp’s ex­pe­ri­ence in the food sec­tor across four con­ti­nents and Fung Group’s knowl­edge of both ex­port trad­ing and sup­ply chain man­age­ment drew China Re­sources to the deal, said Carl Qin, chief ex­ec­u­tive of China Re­sources Cap­i­tal Man­age­ment.

“Their unique ex­pe­ri­ences give us con­fi­dence that we have the right part­ners,” he said.

In­vest­corp al­ready has a part­ner­ship with China Ever­bright that fo­cuses on tech­nol­ogy in­vest­ments. The pair jointly man­age the China Ever­bright New Econ­omy Fund 1 and said they are ex­plor­ing the prospect of set­ting up a suc­ces­sor fund.

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