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Marubeni looking for JV partner to form Southeast Asia-focused buyout fund

Japanese trading house Marubeni [TYO: 8002] is looking for a joint venture partner to form a buyout private equity fund that would focus on investments in Southeast Asia, two sources familiar with the situation said.

A Marubeni spokesperson confirmed post-publication of the article that the company is looking for some opportunities to set up an alternative fund, such like, but not limited to, growth, venture private equity fund or credit fund.

According to the first source, Marubeni wants a Southeast Asia-based and focused partner who can help the Japanese company navigate the very disparate markets in the region. It plans to focus on medium-sized investments but the target ticket size and fund size are yet to determined.

Marubeni has been in talks with several potential partners, the two sources said.

Marubeni declined to comment.

While Marubeni is no stranger in private equity buyouts, this will be the first time the Japanese trading house will have a dedicated investment arm in the fast-growing Southeast Asian region, the first source said.

In 1997, Marubeni launched the MBI Fund 1 with Japan-based PE firm Advantage Partners. Since then it has branched out into venture capital with Marubeni Venture and small- and medium-sized focused PE iSigma Capital. It also formed a turnaround fund Synergy Capital and has tied up with CITIC, Sumitumo Trust & Banking and Shinsei Bank to form CITIC Japan Partners, which is a leveraged buyout investment fund that helps Japanese companies entering and expanding into China.

The second source said Marubeni’s model for this Southeast Asia fund is ASEAN Industrial Growth Fund (AIGF), the Singapore-based, ASEAN-focused PE sponsored by another Japanese trading house, Mitsubishi Corp [TYO: 8058].

AIGF has so far invested in KFC Thailand franchisee Restaurant Development Co (Thailand), serviced offices and co-working space developer KMC Solutions (Philippines), logistics firm BHS Kinetic (Singapore) and meat retailer and distributor Meatworld International (Philippines).

Restaurant Development is reported to be in the market and has attracted The QSR of Asia, one of the operators of KFC restaurants and owned by Thai Beverage [SGX: Y92]. The deal could be valued at USD 300m, as reported.

AIGF has exited premium supermarket chain Jaya Grocer (Malaysia) and sold back its stake to the founding Teng family in November last year. A month later was later sold to Singapore-based super app Grab Holdings [NASDAQ:GRAB] for USD 425m.