Schroder Ventures Asia Pacific Fund, the firm’s third fund targeting the region, notched a first close on $269 million in July and is expected to wrap sometime near the end of this year, said Chairman Anil Thadani, who oversees the unit that manages the fund.
Commitments to the vehicle’s first close ranged from $20 million to $100 million each and limited partners included corporate pensions. At press time, the vehicle had commitments totaling an additional $50 million to $60 million, plus $18 million in commitments from Schroder Venture Partners, Thadani said.
Most L.P.s had backed Schroder’s second Asian effort, Asia Pacific Fund II, a $225 million fund that closed in the spring of 1995. The vehicle has one deal remaining, and Thadani expects the first realizations from that fund this fall.
Old Fund Gives Taste of the Far East
Schroder took over its first non-Japanese Asia Fund from Thadani’s old firm in 1993. Formerly known as Arral Private Equity Trust II, the $145 million vehicle was renamed Asia Pacific Trust (BUYOUTS May 17, p. 24).
Schroder Capital Partners (Asia) Pte. Ltd. seeks majority interests in its portfolio companies and invests in a wide variety of sectors, including consumer products and services, manufacturing, distribution and health care. The firm has not traditionally backed technology companies in Asia, but Thadani said Schroder would consider such investments, drawing assistance from the firm’s London-based technology experts. Schroder Ventures is an international network of venture groups with 24 active funds. The organization was founded in 1983 and has more than $3.8 billion under management.
Schroder Asia invests opportunistically across the region, but Australia, Hong Kong, India, Singapore, Taiwan and Thailand are expected to be home to many of the new fund’s deals.
Schroder Asia will invest in no more than 20 companies and will look to put out on average about $25 million per deal-an increase from the previous fund’s average of about $14 million-to keep its 12-person investment staff from spreading its time too thinly, Thadani explained.
Schroder Asia Pacific features an 80%/20% carried interest split and a 2.25% management fee for its first two years. The fee raises to 2.5% for the remaining eight years. The management fee starts lower because fees from previous vehicles will help pay expenses for some time.