Heritas Capital (Heritas) has held the first close of its third private equity fund, Heritas Growth Fund III (Fund III), at USD60 million.
The first close follows Heritas Capital’s announcement early this year of its plan to launch a USD150 million Fund III as a Pan-Asia Impact Fund focusing on high impact sectors within Healthcare, Education and Technology for building back better post-Covid-19. Fund III seeks to back 10-15 emerging Asian champions with innovative and impactful solutions aligned with selected UN SDG Goals. Ticket sizes for each Fund III investment may range from USD5 million to USD20 million, targeting high growth businesses seeking Series B financing and beyond to advance their solutions at-scale.
The launch of Fund III builds on Heritas’ successful track record of earlier Growth Funds which have deployed USD150 million to back smart platform solutions such as omni-channel healthcare and education solutions, next generation therapeutics, and precision medicine. Heritas has achieved post-investment value creation by supporting founders and management teams in their growth journey, leveraging Heritas’ domain expertise, industry networks, sound governance and sustainable ESG / impact practices. Examples of Heritas-backed category leaders which have shown strong traction and resilience notwithstanding Covid-19 and continued to serve their respective communities with purpose include: Q&M Dental (dental chain, Singapore), Timberland Medical Centre (private hospital, Malaysia), Alodoktor (telehealth, Indonesia), MFine (telehealth, India), and BHL Education (K-12 education, Vietnam). The latest investment by Heritas Capital was its follow-on participation in the USD125 million Series C round of Hummingbird Bioscience announced in May 2021 through Fund II, having been an early backer since Series A and B rounds via its Heritas Venture Fund (HVF) since 2019.
Fund III is set up as the first sub-fund under Heritas-managed Variable Capital Company (VCC), a new corporate structure tailored for investment funds using Singapore as a base for fund management and domiciliation. As a Capital Markets Services License Holder regulated by the Monetary Authority of Singapore, Heritas values the operational flexibility, sound governance and tax advantages offered by VCC and will be evaluating additional impact-oriented sub-funds such as Venture Capital, SPACs and Development Impact Bonds in the future.
With its first close anchored by impact-conscious investors Tsao Family Office and IMC Group, Fund III will go beyond seeking commercial returns to align intentionality and track material impact metrics that are collinear to scaling business and impact goals at the same time. Such impact considerations are integrated within Heritas’ investment processes and aligned with its thesis of achieving impactful change, centred mainly on shifting consciousness, enhancing access and quality, and catalysing market development through collaboration.
“IMC Group’s mission is to serve humanity well-being while creating economic wealth. We are pleased to back Heritas’ launch of its Growth Fund III as an Impact Fund to facilitate the shift of consciousness in business to be in alignment with the development of humanity in the new era of wellbeing,” says Frederick Chavalit Tsao, Chairman of IMC Group.
“Tsao Family Office, representing one of Asia’s most enduring business families, with over a century of history, is pleased to support Heritas Growth Fund III, an impact fund investing in businesses contributing to the benefit of society,” says Bryan Goh, CEO of Tsao Family Office.
“The first close of Heritas Growth Fund III is timely as Covid-19 has widened existing inequalities and devastated lives and livelihood; but also offered the opportunity to reconstruct more sustainable growth paradigms. With the accelerated innovation and adoption of new technologies and business models, we see new investment opportunities to back high growth businesses across Asia delivering scalable access to affordable quality healthcare and education, in line with UN SDGs. We are thankful for the support of impact-conscious anchor investors Tsao Family Office and IMC Group, and look forward to collaborating with like-minded impact investors, founders and stakeholders to achieve sustainable commercial success as well as impact creation,” says Chik Wai Chiew, CEO and Executive Director at Heritas Capital.
