CIMB Group Teams Up with Mitsubishi to Launch a PE Fund


March 4, 2015

There is a new private equity fund to keep an eye out, as reports came through yesterday that CIMB Group and Mitsubishi have launched a new PE fund. The fund is called the ASEAN Industrial Growth Fund (AIGF) and its size will stand at $130 million before further fundraising rounds later this year.


The two companies published a press statement on Tuesday, saying the PE fund would also have the Development Bank of Japan joining in as a general partner. Both CIMP Private Equity and Mitsubishi would handle the management of the fund.


The AIGF will have a Southeast Asia focus, aiming to invest in middle market companies. It is expected to pay special attention to markets in Indonesia, Malaysia, Singapore and Vietnam. Furthermore, the fund will be headquartered in Singapore.


First Round of Investment
The company further announced it has fundraised $130 million in its first closing. The Malaysian Insider reported that the fund has many notable investors backing it. For example, the leading diversified Japanese financial institution, Shinsei Bank Limited, is among the investors. Other notable investors include the Toho Bank Limited and Hitachi Limited.


In the next 12 months, the aim is for the fund to continue fundraising, with the hope of reaching around $200 million. Considering current investor appetite towards the Southeast Asia region, it wouldn’t be a surprise if the fund reaches its target well on time.


Targeting Growth Opportunities in the Region
The fund hopes to capitalise on the strong economic growth of the Southeast Asia region. By targeting mid-market opportunities, the companies could greatly benefit from the current infrastructure development and urbanisation of the region’s countries. Asia is also a strong emerging market for burgeoning demand towards improved and high-quality services.


The joint statement said, “AIGF is a unique platform that seeks to match the growing interest of Japanese corporates for ASEAN business opportunities to the strong demand for Japanese expertise among ASEAN corporations”. Kenny Kim, adviser to the group CEO of CIMB Group, told the Malaysian Insider, “We are optimistic (that) our regional economy will continue to demonstrate robust growth, leading to the continued rise of the middle class who will demand better products and services,” pointing out that these will be the main factors behind their investment thesis.


Diversifying Business Operations
For Mitsubishi, the fund is a clear sign towards a more diversified business operation. The company is currently Japan’s largest trading company and AIGF will be the main platform for the company to continue its private equity investments in the region. The company has said it wishes to expand its current operations from traditional trading to investing in sectors such as retail business, financial products and manufacturing, among others.


For CIMB Group, Malaysia’s second largest financial service provider, the move is part of its strong commitment to the region. The company has previously worked in a variety of fields ranging from private equity to asset management and insurance.

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