Creador beats expectations with $300m final close on Fund II
21.08.14 / Author: Tim Burroughs, Asian Venture Capital Journal
Creador has reached a final close on its second fund at the hard cap of $300 million. A rush of late commitments saw the Southeast Asia and India-focused GP exceed its projected $275 million total.
The fund launched in May 2013 with an initial target of $250 million and a first close of $105 million came three months later. LPs include Siguler Guff, which picked Creador II as the first non-BRIC allocation in Asia from its emerging markets-focused BRIC Opportunities Fund III. A Malaysian pension fund is also said to feature among the LPs, as well as three fund-of-funds that came in towards the end.
Creador has already invested approximately half the new fund across six deals – two each in Indonesia, Malaysia and India. An announcement on a third Malaysia transaction is expected imminently.
According to Brahmal Vasudevan, Creador’s CEO, India is the one LPs are most wary of. This is likely tied to economic volatility in recent years as well as a relatively poor track record for private equity exits.
However, Vasudevan said that Creador had managed to article a “fairly crisp strategy” for India, with its three longest-standing investments in the country across the two funds – Cholamandalam Investment & Finance, Repco Home Finance and Somany Ceramics – all trading at least 2.5x. A fourth investment, in plastic water tanks and pipes manufacturer Vectus Industries, was completed in June.
Fund II launched just four months after Creador reached a final close of $130 million on its debut vehicle. The narrow timeframe was due to Fund I coming under target: the private equity firm felt it could invest $80 million and, working with a smaller-than-expected pool of capital, it burned through the dry powder reasonably quickly.
Seven investments were made out of Fund I and there has been one partial exit – from Malaysian restaurant chain and instant coffee brand Old Town White Coffee. The fund has so far generated a gross IRR of 36% and a multiple of 1.5x.
Earlier this year the GP established Creador+, a dedicated operations team made up of ex-Boston Consulting Group executives. It is based out of Kuala Lumpur.