Navis Nears Close of $300M

Nicholas Bloy, one of the three co-founders of Navis Capital, in Kuala Lumpur, Malaysia, tells PE Week that the firm anticipates a $300 million close on its third buyout fund, Navis Asia Fund IV, before the end of June.

The firm’s first and second funds raised $70 million and $90 million, respectively.

The third fund, similar to its predecessors, will invest in Southeast Asia (including Malaysia, Thailand, Singapore and Hong Kong), but Bloy says that he also expects the new fund to enter India and Australia to make investments. Navis made its first investment in India in 2004, when it acquired one of the largest airline catering companies in the country.

In anticipation of more deals in India, Navis is opening an office in Mumbai later in 2005, Bloy says. The firm at present maintains offices in Kuala Lumpur, Bangkok and Hong Kong. To date, the firm has not invested in Mainland China, Korea or Japan.

The firm currently has 14 portfolio companies and employs 25 investment professionals – a high ratio of investment staff to portfolio companies.

Bloy says that fund III, which held a first close of $100 million in October, could have closed with $800 million in commitments, because the interest from LPs was that high. “Though there is that much demand in the market, it’s just not plausible to raise up funds so much,” Bloy says.

The remarks come about a month after CVC Capital closed a $1.9 billion buyout fund for the region.

“Part of our restraint comes from our LPs, who tell us what is reasonable to deploy,” Bloy says. “Also, we like to fly a bit below the radar of the larger funds, so that our respective deal sizes do not overlap too much.”

Bloy wouldn’t disclose the names of LP’s, although it’s known that Switzerland’s Partners Group is an investor in fund III. Bloy, however, does break down the origins of the expected LPs for the fund. About 40% will come from pensions; 20% from fund-of-funds; 20% from family offices; 15% from financial institutions; and 5% from high net worth individuals.

Bloy also says that about 50 of the firm’s LPs from prior funds are re-investing in fund III. “That’s all but two,” he says.

Navis is still investing its second fund, which closed in 2003.

Navis, which is a control investor, works closely with the management of the companies it acquires.

The firm has already made two investments from the new fund: a $42 million acquisition of the Kentucky Fried Chicken (KFC) business in Hong Kong and Macau; and the LBO of the Asia Pacific franchise holder for Europcar, the auto rental company.

Bloy says that the firm was expected to make the fund’s third acquisition, of an international security consultancy firm, this month.