Having never entertained the idea of an IPO exit in its 20 years of existence, Southeast Asia-based private equity firm Navis Capital Partners may start looking into public listing as a potential divestment strategy in the future, according to co-founder and managing partner Nicholas Bloy.
“What we’ve learned over the years was that as these companies get bigger and approach billion dollars of market cap, that is getting to the size where even if you are a majority control investor and taking it to IPO, there is probably enough liquidity for you to get out in a fairly straightforward way,” Bloy said in a fireside chat at the recently concluded Asia PE-VC Summit 2018 organised by DEALSTREETASIA in Singapore.
Since it was founded in 1998 by Bloy and his co-founders, Navis has overseen as many as 46 exits. None, however, have been done through the IPO route, as he feels that in the past the state and depth of the Southeast Asia capital market do not make it plausible for a majority shareholder to sell down to zero per cent.
Going forward, Bloy said Navis will employ a dual track process, in which both IPO and trade transaction will be treated as possible exit paths. By grooming a company for IPO, Navis expects to receive better value for the company, even if it ends up being acquired by a trade buyer.
Speaking in front of an audience of PE and VC representatives from across Asia, Bloy confirmed that Navis is currently raising its eighth fund, with a “hypothetical” target of around $1.75 billion, as reported by this portal last month.
It is understood that although the new fund will stay consistent to the firm’s ticket size of $50 million to $150 million, it will also make smaller investments of $25-50 million to bridge a funding gap it sees as being left unaddressed by most venture capital firms and PE players in the region.
When asked about the possibility of investing in tech companies, as a number of PE firms have started to do, Bloy said it is currently not a proposition that is of interest to Navis.
“We’re not interested in buying pure, early-stage tech business, but what we are very interested in is taking tech and helping enable stronger competitive position for brick and mortar business and we do that a lot,” he said.
Bloy said Navis continues to focus on two broad categories which are the manufacturing ecosystem and consumer business. The firm manages about $5 billion in public and private equity capital, will continue to source the national champions to be turned into a regional champion through M&A and/or organic means.
