Lombard Investments Inc. has held a first close on Lombard Asia III, having raised $150 million in commitments thus far, PE Week has learned.
The fund, which will invest in expansion capital and buyout deals in Asia, is targeted at $500 million.
Lombard says that among the limited partners in the fund are institutions from Malaysia, Taiwan, Manila and the United States, but identified only one LP – the California Public Employees’ Retirement System.
Thomas “Toby” Smith, one of Lombard’s managing partners, says the new fund will continue the firm’s same sector focus as its two prior Asian funds: niche manufacturing, food, tourism, retail, auto-parts and financial services. Investments will range in size from $10 million to $50 million in each portfolio company.
The firm expects to invest primarily in Southeast Asia and China – from offices in San Francisco, Bangkok and Hong Kong – but “our geographic focus will adjust over the life of the fund, reflecting changing opportunities and market conditions across the region,” Smith says. Lombard’s two prior funds were a post-crisis Pan-Asian fund and a Thailand-only country fund.
If it closes at $500 million, Lombard Asia III will rank as Asia’s largest regional private equity fund, surpassing U.K.-based, Actis South Asia Fund, which Actis closed late last year with $475 million in commitments.
Lombard should find success attracting LPs, as it is one of the few firms in the region that is expanding. Others, such as H&Q Asia Pacific and Walden International, are quietly winding down some offices and new investments in Southeast Asia.
Pote Videt, managing director of Lombard’s Thailand offices, says that the firm has closed three new investments over the last two months from its existing Thailand Equity Fund. The firm acquired interests in S&P, a leading restaurant and bakery chain; Kantana, a film and TV production company, which produced the first fully animated film made entirely in Thailand; and Preuksa, a low-cost housing manufacturer.
“We hope we can leverage our experience in Thailand to have similar success in new markets in China and selected countries in Southeast Asia with our new fund,” Videt says.
Videt notes that the new fund will target Vietnam, Malaysia and Indonesia, areas that have macroeconomic potential, but which have been under-exploited by private equity firms.