Hong Kong and London-based private credit and private equity fund manager ADM Capital has announced the final close for its second Asia Secured Lending Facility (ASLF II) at $178 million, it said in a statement today.
ASLF II, also known as the Somei Lending Platform, received commitments of $50 million and $10 million from the US government’s development finance institution Overseas Private Investment Corporation (OPIC) and Calvert Impact Capital, respectively.
It secured its seed capital from existing investor International Finance Corporation (IFC) and another undisclosed financial institution back in 2016.
The capital from ASLF II will be used to make bilateral, direct loans to small and medium enterprises (SMEs) across the region with equity participation and profit-sharing mechanisms used to enhance returns.
According to ADM Capital, ASLF II has already made seven investments since its first close in September 2017.
“We are delighted to partner with two additional leading development finance institutes that share our commitment to sustainably advancing Asian emerging economies. Our long-term capital supports growth and allows borrowers to operate through periodic business fluctuations, while providing attractive risk-adjusted returns to investors,” said ADM Capital co-founding partner Christopher Botsford.
In an interaction with DEALSTREETASIA, ADM Capital’s investor relations and marketing head Christopher Smith said the firm expects to complete 8-12 more deals in 2019, thanks to a healthy pipeline.
“For ASLF II, we’re generally writing tickets between $10 million and $20 million, although this will vary across emerging Asian markets. We manage other Asian private credit funds which provide [us with the] capacity to do larger transactions.
“Our pipeline is consistently very strong and self-sourced. We believe 2019 will be a good year for us to deploy, and we’ll look to disburse 8-12 secured private loans in ASLF II,” he said.
ASLF II’s predecessor — the $101-million ASLF I — was launched in 2012 in partnership with IFC and has been fully deployed.
“At IFC, one of our key areas of focus is SMEs. We reiterate our support for this Facility—which succeeds ASLF I – to support small businesses, which drive economic growth and create between 70 and 95 percent of new employment opportunities in the emerging economies across the region.
“While access to capital continues to be one of the toughest challenges, we hope to reach out to the sector more effectively and efficiently through our continued partnership with ADM Capital,” said IFC’s East Asia and the Pacific director Vivek Pathak.
Cibus Fund closed in October at $450m
ADM Capital also announced that it closed its private equity fund Cibus Fund at $450 million in October. The fund is a global agribusiness investment vehicle targeting sustainable food-chain companies in select global markets and reached its first close of $100 million last May.
Smith said that the Cibus Fund has made five investments so far, and is about to conclude its sixth deal, with several more deals in the pipeline.
In January, the firm acquired a mature almond orchard in Australia through the Cibus Fund, following its investment into US-based vertical farming business Aerofarms and the acquisition of Spanish premium Extra Virgin Olive Oil producer Innoliva last year.
“There’s definitely enough deal flow, particularly given the structural changes in supply and demand and the rapid development of technology. Technological innovation and big data are changing the global food chain through increasing efficiency and higher yields. We’re very happy with the amount raised,” said Smith.
On investment strategies, Smith said that the fund has a 10 per cent allocation to invest in the food and agriculture tech space by taking up minority stakes.
“In more traditional sectors and companies, we will look at buyouts which was the case with a Spanish olive oil producer and an Australian mature almond orchard. In the food and agriculture tech space, we would look to take minority stakes. We endeavour to take board seats and to be very active in our holdings. The tech focus is limited to about 10 per cent of the fund and so it’s a relatively small portion,” he said.
He added that the average holding period for investments made via Cibus Fund would be about six years while cheque sizes will range between $20 million and $50 million.
Founded in 1998, ADM Capital manages about $1.6 billion across 15 countries. The investment manager claims to have achieved average annual investment returns of 17 per cent over the past five years for its private debt funds.
