Southeast Asian private equity firm Navis Capital Partners’ inaugural private credit fund will focus on backing climate and sustainable projects.
The Navis Asia Credit Fund, which secured its $135 million first close in December, raised the majority of the capital from development finance institutions (DFIs) that aim to push impact investing in emerging markets.
According to the Swiss Investment Fund for Emerging Markets (SIFEM), which committed $15 million, the vehicle will “focus on strong developmental themes”, such as decarbonisation, production supply chains, agriculture, social infrastructure, and underserved companies and customers.
The fund, which had originally planned to secure its first close by May 2024, targets to raise a final corpus of $350 million by end-2025.
Climate finance will be a core aspect of its investment strategy, added another limited partner (LP) — The Belgian Investment Company for Developing Countries (BIO). Navis Capital plans to invest 60% te capital of its first credit fund in projects “qualifying as climate finance on best effort basis,” BIO revealed.
BIO and its associate, The SDG Frontier Fund, committed a combined $20 million to Navis Asia Credit.
“The Fund will bring a novel debt instrument that will have ESG-linked performance covenants embedded in its structure,” the Belgian DFI said.
British International Investment (BII), which invested $25 million, added that its contribution “will focus exclusively on climate-related investments” in areas such as renewable energy, supply chain decarbonisation, sustainable logistics and sustainable real estate.
Other LPs include Norfund and International Finance Corporation (IFC).
DealStreetAsia reported last year that Navis was assessing climate assets as an important theme for its private credit platform.
The credit business aims to build a portfolio of approximately 15 investments, with ticket sizes ranging between $15-35 million, per SIFEM’s commitment announcement in December. Navis intends to provide senior secured loans with three to four years tenor.
The fund will focus on Vietnam, Indonesia, Thailand, the Philippines, and Malaysia.
The fund’s geographic focus will be major markets in Southeast Asia, including Vietnam, Indonesia, Thailand, the Philippines, and Malaysia.
Kuala Lumpur-based Navis is also in the fundraising process for its ninth buyout fund and second continuation fund.
DealStreetAsia reported recently that TPG NewQuest might be the anchor investor for Navis’ second GP-led secondary vehicle, which could raise as much as $150 million.
Navis is understood to roll up education assets in Thailand, Vietnam and Cambodia into the new fund, while continuing to expand its school portfolio through bolt-on acquisitions.
Meanwhile, the Malaysia-headquartered firm aims to raise $1 billion for its ninth flagship fund. Its $900 million eighth private equity fund was closed in 2021.
