Bamboo Capital Partners Deploys $50m in Asia’s Emerging Markets

Oct 2017
Global, October, 09 2017 - European private equity firm Bamboo Capital Partners has deployed a total capital of about $50 million in Asia, a senior executive with the fund manager told this portal.

Bamboo Capital Partners made initial investments worth some $35 million in this region, and with the “recap” amount added, it is close to $50 million, said Imraan Mohammed, the firm’s Asia head.

Across its two financial inclusion funds and Oasis Fund, Asia accounted for around 25-30 per cent of its capital allocation, he added.

Focused on the sectors of financial services, healthcare and energy, a lot of the PE firm’s investments were made in India.

Even as Latin America represents the largest part of the firm’s portfolio, Mohammed said the funds will look at investing more in Asia, particularly Southeast Asia.

The region is exciting due to its significant middle-to-low-income consumer segment, with greater spending power and need for financial services, while the penetration is extremely low across its emerging markets.

“Obviously I am not talking about the likes of Singapore, Hong Kong or South Korea, but countries where financial inclusion levels are very low, at 10-25 per cent. Those are the countries in focus for us from the perspective of market opportunities and the commercial aspect of that, and also from a point of view of financial inclusion and enhancing that within those countries,” he added.

Although Bamboo Capital Partners will maintain its sector focus on finance, healthcare and energy, Mohammed opined that the firm’s global focus might begin to change into a more regional focus.

“We do expect to launch a regional Asia fund in the coming couple of years,” he said.

While it’s early to talk about returns in Asia since most of the firm’s investments are in the value creation stage, the regional director revealed that Bamboo’s exit from Mongolia’s Xac Bank in 2013, which realised around 18-20 per cent IRR, was one of the most sizeable exits that it had seen in the region.

However, a challenge to generating returns in Asia is regional scalability, according to him. Funds need patience in emerging markets, and should prepare to position themselves as long-term investors, Mohammed asserted.

“From a macro perspective, we are very bullish about Asia at the moment,” he said.

Bamboo Capital Partners has recently started to disburse capital for tech, targeting investments at Series B and C stages. However, the company is not a pure tech investor, but looks at businesses that incorporate technology to enhance what they are doing in the sectors it tends to invest in.

Bamboo’s first Financial Inclusion Fund hit $195 million in fundraising, while the second financial services investment vehicle launched last year has reached $40 million commitment, according to data on The Oasis Fund had raised $53 million.

Source : Deal Street Asia

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