Brummer & Partners sets up $120-M private equity fund for Phl

MANILA, Philippines - Swedish fund manager Brummer & Partners is establishing a $120 million private equity fund dedicated for the Philippine market.

Brummer & Partners chairman and founder Patrik Brummer told reporters in a press briefing yesterday that they have launched the Navegar Fund to invest in growing companies requiring new capital to expand operations and acquire new business.

The company has approximately $15 billion worth of funds under management worldwide.

The Navegar Fund would particularly focus on private companies not listed in the local stock market, Brummer said.

“This will serve as an alternative source of capital for private companies who are not publicly-listed but are also relatively big and mature. We would likely make equity capital or make minority investments. We will also be making active participation on these companies’ board/executive committee and provide expertise in addition to capital infusion,” Navegar managing partner Honorio Poblador IV, said.

“This marks a milestone in the Philippines’ financial services landscape, with Navegar committing 100 percent of its capital to Filipino businesses,” Poblador added.

He said talks with the Sweden-based alternative asset manager to put up the fund started in 2005 and conceptualization finally took off in 2010.

Apart from the confidence on the growth prospects of the country’s economy, Brummer said they believe there is still a huge market for private equity fund in the Philippines.

“We are very excited by the prospect of investing in the Philippines,” said Brummer. “Every time I visit the Philippines I am buoyed by the country’s solid fundamentals and the predictable growth of the overall economy. It is refreshing to see such a dynamic and positive business environment in light of the otherwise challenging circumstances in the developed world,” he added.

“The time is right for private equity in the Philippines. We see a number of potential investee companies whose capital requirements are both pressing and substantial. Navegar will provide such enterprises with a combination of strategic and financial support in order to drive both top- and bottom-line growth,” said Poblador, a former managing director for Rothschild’s investment bank in the Philippines.

Poblador said they would invest in eight to 10 companies with $10 million to $20 million worth of investment each.

Within the year, they expect to invest in at least two companies.

According to Poblador, they are hoping to make the fund investment in the next five years. If the need arises, he said they would put up another fund of the same size after the five-year period.

He said they are eyeing to invest in businesses with track record preferably in engaged in consumer (food, apparel, retail, consumer finance, healthcare and real estate) and services (BPO, tourism, education and manufacturing).

“Private equity is often cited as a critical success factor in the growth of emerging economies, where capital tends to be both scarce and short-term. Many stock markets globally have suffered the effects of hot money flows. Our fund is committed to building businesses in the Philippines for the long term, no matter what happens in the public markets,” Brummer said. “We look forward to building our business in the Philippines.”