Mekong Capital’s Mekong Enterprise Fund II (MEF II) has successfully sold 100 per cent of its final remaining investment, resulting in the fund achieving a net return multiple of 4.5x and net IRR of 22.5 per cent for its investors.
This has marked one of the most successful funds in Asian Private Equity.
Launched in 2006, MEF II is the second private equity fund managed by Mekong Capital. MEF II’s notable investments included Mobile World (Vietnam’s largest nationwide retailer of mobile devices and consumer electronics), Golden Gate (the leading restaurant chain operator in Vietnam), Vietnam Australia International School (a leading private bilingual K- 12 school in Vietnam), Mai Son (a leading fashion retailer) and ICP (personal care products).
MEF II completed the sale of its last remaining 5 million shares in Mobile World in January 2018, resulting in a 56.9x gross return multiple and 61.1 per cent gross IRR, making this investment being one of the most successful investments in the history of Asian Private Equity. Prior to that, the Fund generated a gross return of 4.5x and 9.0x for its investments in Vietnam Australia International School and Golden Gate, respectively.
The last divestment of MEF II was Asia Chemicals Corporation (ACC) for a total consideration of USD8.9 million, generating a gross return multiple of 2.6x and a gross IRR of 15.1 per cent for the investment in ACC. The Fund initially invested USD3.8 million in ACC in 2011, which was its 10th and final investment. Established in 2001 as a privately-held company in the food industry, ACC has pivoted into a leading distributor of high-quality specialty ingredients, chemicals, non-oil related commodities and other materials, sourcing from worldwide suppliers and selling to a wide range of leading enterprises in Vietnam. ACC achieved a cumulative annual net profit growth rate of 18 per cent over the holding period of the investment.
Jeremy Paulson, Chairman of MEF II, says: “The completion of the sale of the final holding in MEF II brings to a close the life of what has proved to be a most rewarding fund investing in new and fast-growing companies in Vietnam. MEF II, through its Investment Manager, Mekong Capital, found an interesting range of investments which fully reflected the rapidly changing consumer sector in what was a fast-growing economy. This has resulted in a highly successful investment for MEF II’s shareholders.”
Chris Freund, Partner at Mekong Capital, says: “We are delighted that MEF II and its investee companies have been a great success over the last 12 years. MEF II represented a critical turning point in Mekong Capital’s history as it was the fund in which we started to focus on consumer-driven investments, and also comprised the initial companies that applied the Vision Driven Investing framework. We are committed to continue to apply this framework to consistently deliver excellent performance, and to reinvent Private Equity in emerging markets.”