Affirma Capital, formerly known as Standard Chartered Private Equity, is solidifying its presence as one of the most active dealmakers in Southeast Asia as it benefits from seamless cooperation between its offices.
The firm, which focuses on emerging market countries, was established after the private equity unit was spun off from Standard Chartered Group in August 2019. It has six offices in Singapore, Dubai, Mumbai, Shanghai, Seoul and Johannesburg.
Affirma Capital has two types of funds: one raised and managed at the global level, and the other raised by each office from local investors.
The second type of funds mainly target local companies, but they also invest some of their cash in overseas deals that are sourced through the firm’s global network. This could appeal to investors who want to invest in a fund that is domiciled in their country and have some exposure to foreign investments, industry watchers said. The Seoul team, which is currently raising its fifth blind-pool fund with a target size of 500 billion won ($448 million), also relies on this advantage when marketing the fund to investors.
Affirma Capital has built a strong track record, especially in countries included in the so-called New Southern Policy, which is being pursued by the South Korean government to deepen relations with the Association of Southeast Asian Nations (ASEAN) and India. The company has executed 26 deals worth a total of 1.6 trillion won that involved companies in those countries, with a cumulative exit value of about 3.5 trillion won, according to sources with knowledge of the firm. This represented a multiple of 2.1 times and an internal rate of return (IRR) of 32%.
Previous portfolio companies include Singapore’s leading agricultural group Wilmar. Affirma Capital bought 3.6% of the company in 2006 for about 54 billion won and later exited the investment with an IRR of 230%. Its 2004 investment in Punj Lloyd, an Indian engineering, procurement and construction contractor, generated an IRR of 110%.
In 2010, the firm invested 151 billion won in Infastech, a producer of engineered mechanical fasteners in Singapore, and later earned 423 billion won with a multiple of 2.8 times and a 55% IRR. Its 14 billion won investment in Vietnamese restaurant chain operator Golden Gate Trade & Service in 2014 delivered an IRR of 25%.
Among the company’s latest investments are Tirupati Group, a leading nutraceuticals-focussed contract research and manufacturing company in India, and Vietnamese online recruiting company Sieu Viet. Both deals were partly financed through the fourth blind-pool fund run by the Seoul team. (Reporting by Hee-yeon Han)