Middle Eastern institutional investors want to diversify their portfolios to take advantage of the growing economies in Southeast Asia, according to TVM Capital Healthcare. The firm has offices in both Dubai and Singapore.
“Middle Eastern Family Offices used to focus almost exclusively in the US and Europe. They didn’t look at Asia and that is changing now,” said Helmut Schuehsler. He is the chairman and CEO of TVM Capital Healthcare. His firm announced last month that it had closed its second Middle East Fund, which attracted US$250 million.
The TVM Healthcare Afiyah Fund LP was a collaboration between institutional investors from the Gulf countries and Europe. Jada Fund of Funds (a subsidiary of Public Investment Fund of Saudi Arabia) and Saudi Venture Capital were the leading participants.
“There are established links between China and countries such as Saudi Arabia and the United Arab Emirates. But more recently, due to the political developments between China and the United States Middle Eastern countries have been trying to remain neutral and develop deep relationships with everyone, including and especially Southeast Asian nations,” Schuehsler stated.
TVM Capital Healthcare, a provider of eye care services in Vietnam, has already invested into three targets from the new fund. One of these is Alina Vision.
TVM Capital Healthcare will also raise a separate Southeast Asia Fund with a target of US$150 to US$200 Million. According to Schuehsler, the new fund will have its first closing, when investors commit their investment, by the end this year.
According to Schuehsler, Middle Eastern limited partnerships (LPs) are diversifying their investment strategies beyond traditional real estate to include alternative asset classes, such as private equity.
“When I refer to private equity, I am referring to the large companies. They were the primary recipients for capital,” he explained. “But as the years pass, Middle Eastern investors are becoming more diversified and are looking to smaller companies and smaller private equity firms that are more focused growth capital.”
TVM Capital Healthcare has been active in the Middle East region since 2010. It invests in companies in growth and expansion stages that have already started generating revenue and offer a “substantial growth opportunity”. According to the chairman, the fund manager invests between US$10 million and US$30 millions in healthcare manufacturing and service companies.
“We don’t shy away from taking the majority in a business, and at minimum, we would like to be a substantial minority,” he said.
The chairman stated that the company plans to allocate the entire capital raised through the Afiyah Fund to six to eight target companies by the end this year.
Schuehsler stated that “Asia will mature as an investment destination in the next decade, and there’s a lot of entrepreneurial energy in Asia.” “The region will become a third pillar for international diversification of Middle Eastern investment.”