Navis Capital Partners, a Malaysia-headquartered private equity firm that primarily invests in Southeast Asia, plans to raise a continuation vehicle of at least USD 600m for multiple existing healthcare and education assets, according to three sources familiar with the situation.
The buyout specialist began talks with potential investors at the beginning of the year, said the first and third sources. The fourth source added that due diligence is ongoing.
Navis initiated the continuation vehicle process at the same time as its ninth flagship fund, which has a target of more than USD 1bn, the first source said. Rodney Muse, a co-founder and managing partner of Navis, told Mergermarket last October that the firm wanted to raise between USD 1bn and USD 1.3bn for Fund IX, with a formal launch to come in the first quarter of 2024.
Campbell Lutyens is advising Navis on the continuation vehicle. Navis and Campbell Lutyens both declined to comment.
Nick Bloy, another co-founder and managing partner at the private equity firm, offered some insights into the project at the AVCJ Private Equity Forum Australia & New Zealand in March when commenting on how the Southeast Asian market was suited to more than just sector-agnostic strategies.
“You can start to think about more thematic investing and around that you can build specific vehicles. Right now, we are putting all our private schools and all our private hospitals into a new fund called the PHASE fund, which stands for private hospitals and schools expansion fund,” he said.
The objective of the continuation vehicle is to generate distributions for existing LPs, while raising a portion of new capital to support the growth of a select group of assets. These assets will come from Fund VII (2013 vintage, closed on USD 1.5bn) and Fund VIII (2018 vintage, closed on USD 900m).
Navis raised its first-ever continuation vehicle alongside Fund VIII. It secured USD 450m, which was used to acquire five companies from Fund VI and provide a small amount of expansion capital.
Companies to be moved to the new continuation vehicle include healthcare assets such as Vietnam-based Hanoi French Hospital and Thailand’s Nitipon Clinics, the first source said. Navis invested in Hanoi French and Nitipon in 2015 and 2016, respectively. The third source added that Vietnam’s IGC Group – an operator of over 20 schools and learning centres, acquired in 2019 – would also feature.
Among the other school and hospital assets in Funds VII and VIII listed on the Navis website – excluding investments made in the past 18 months – are CIA First International School in Cambodia, Ambassador Education Group in Thailand, Aurelius Healthcare in Malaysia, and S-Spine and Nerve Hospital in Thailand.
Navis recently exited another education portfolio company, SEG International [KLSE: 9792], with the sale of a 20.55% stake to the Malaysia-based company’s group managing director and major shareholder for MYR 112.98m (USD 24m). It invested in SEG in 2012 and moved to privatize the business, but shareholders rejected the offer, as reported.
As of March, Navis had completed 96 primary transactions, and made dozens more bolt-on acquisitions, since 1998, Bloy told the forum.
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