Investcorp closes US$275m Asia food brands private equity joint venture vehicle

ASIA – Bahrain-headquartered global alternative investment manager, Investcorp has announced the first closing at US$275 million, of its Asia food brands private equity platform that the investment firm jointly runs with its Chinese partners.

The platform was established in November last year by Investcorp, China Resources, one of the world’s largest owners and distributors of food brands in Greater China and Fung Strategic Holdings Limited, a member of Fung Investments aiming to invest US$500m in food brands and manufacturing sites in Asia.

The investment platform primarily focuses on capturing the potential growth and market opportunities in Asia’s highly fragmented food sector.

Together, the partners aim to invest in the branded condiments, packaged foods and healthy snacks sectors and build a diversified portfolio of investments to support fast-growing businesses with anticipated higher margins and defensive franchises.

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The partners had initially noted that the fund will also invest in premium brands in niche sectors, such as condiments, packaged food, and health snacks in Singapore, and greater Southeast Asia.

In the past several months, Investcorp has seen strong interest in platforms of this type given the food sector’s traditionally defensive and resilient qualities especially in the current market landscape.

With a potential of 120 million Chinese households set to become middle class consumers over the next decade, the investment firm believes that China can provide a significant surge in domestic consumption growth.

China counts as the world’s largest and fastest-growing consumer market and it is poised for further growth as Chinese millennials spend more on premium and healthier brands.

“We are encouraged by the growth factors that we see in the food brand sector in Asia, which we believe offers attractive and defensive qualities in the current environment with consumers increasingly seeking access to trusted quality food products,” comments Mohammed Alardhi, Executive Chairman of Investcorp. 

“We appreciate the support from our existing joint venture partners as we continue to progress this platform.”  

Hazem Ben-Gacem, Co-CEO of Investcorp and the Chairman of the vehicle’s investment committee, added that the platform believe there is strong market demand for defensive, resilient and growing investment opportunities in the current landscape.

Along with our blue-chip partners in China Resources and Fung Strategic Holdings, Hazem noted that the partners already have deep experience and knowledge in the food sector.

“We believe that investing in growing food brands in the world’s largest consumption market, and in one of the traditionally most defensive sectors, represents an attractive opportunity to enhance value for our stakeholders and communities while fulfilling a very important need in delivering quality, healthy, branded and packaged food products,” Hazem said.

Investcorp has established experience investing in companies operating in food sectors and currently stands as one of the few private equity firms to invest in this sector across the US, Europe and the broader Middle East and North Africa region, including Turkey.

Some of Investcorp’s present investments in the food sector include; Saudi Arabian retailer, Bindawood Holding; US seafood company, Fortune Fish & Gourmet; and Turkish meat processor, Namet among others.

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