Singapore’s Oversea-Chinese Banking Corp (OCBC) and its asset management unit Lion Global Investors, have closed a S$550 million ($393 million; €348million) private equity fund to invest in agriculture and commodity companies across Asia.
The fund, Lion-OCBC Capital Asia Fund I, launched last November and closed 40 percent up on its S$400m target due to investor demand, the firms said in a statement.
“We introduced this fund to meet growing interest in alternative assets from our market partners and high net worth customers in Bank of Singapore,” Daniel Kwan, head of OCBC Bank’s private equity investment arm, Mezzanine Capital Unit (MCU), said in a statement. Bank of Singapore is OCBC’s private banking subsidiary.
Kwan added that MCU has consistently delivered an IRR of more than 20 per cent in the past six years and that investors in the new fund “were attracted to the superior returns that MCU has delivered as a bank-sponsored investment fund”.
This is the debut private equity fund from OCBC, which has previously invested in private companies through MCU.
The fund will invest in small- and medium-sized enterprises in Singapore, Malaysia, Indonesia and China, with a focus on agriculture and commodities businesses, as well as consumer industries. While growth in agribusiness opportunities in China has spurred an rise in private equity activity, private equity firms in the country have said the industry needs scale.
“In recent years alternative investments have found a growing audience among investors seeking alpha solutions in an uncertain global economic environment,” Gerard Lee, chief executive of Lion Global Investors, said. Lion Global Investors is one of the largest asset managers in Asia with assets of S$36 billion and runs a suite of 20 funds.
Investors in the fund include insurance companies, regional banks, sovereign wealth funds and high net-worth individuals.