The investment firm targets new LPs such as funds-of-funds, sovereign wealth funds, pension funds, insurance companies, and family offices, he said.
EmergeVest has raised over USD 525m to date and targets to raise a significantly larger sum for its next fund, he said. The PE firm expects to commit 10% to its new fund using USD 100m in proprietary capital from its balance sheet, he said.
EmergeVest will seek to make seven to 10 investments through the new fund with initial cheques of USD 75m-USD 100m, said Zarin.
The new fund will have a lifespan of eight to 10 years, he said.
Established in 2013, EmergeVest had USD 860m in assets under management (AUM) as of 31 December 2021 through four funds and two family office vehicles, he said. Its existing LPs include funds-of-funds based in Europe and the US and Asia-based family offices, among other institutional investors, he said.
Investment strategy
EmergeVest pursues buy-and-build growth opportunities in the supply chain, technology and finance sectors in Asia and Europe, he said. It seeks profitable targets with earnings of at least USD 10m, he added.
The PE firm has so far invested in 26 companies in total with USD 25m-USD 75m cheque sizes, said Zarin. It has about USD 100m in dry powder remaining to be deployed, he added.
The PE house acquires mid-sized businesses to grow organically, before using the portfolio company to make addon acquisitions to achieve revenue synergies, said Zarin.
In November 2018, EmergeVest created its flagship asset EV Cargo by combining six UK-based logistics companies – Adjuno, Allport Cargo Services, CM Downton, Jigsaw, NFT and Palletforce – with GBP 850m (USD 1bn) worth of revenue annually, as announced.
EV Cargo is expected to continue making acquisitions, with one to two more buys on the cards this year to bump revenue growth, this news service reported.
EmergeVest focuses on high-growth economies such as China, India, and Southeast Asia given their dynamic supply chain and logistics activities, he said.
The PE firm targets a minimum internal rate of return (IRR) of 25%, or 2.5x on invested capital, said Zarin.
Exit goals
Mergermarket reported EmergeVest’s intention to list EV Cargo in three years’ time, at which point the Hong Kong-headquartered logistics company is expected to generate over USD 3bn in revenue. JPMorgan is currently the sole financial advisor on the potential deal.
The PE house has exited four investments so far including Jiangsu-based apparel supplier JD United Holdings, he said. The asset was sold in 2017 to Taiwanese garments maker Roo Hsing [TPE: 4414], with the assistance of Ropes & Gray, as reported.
ESG-friendly practice
EmergeVest embeds (environmental, social, and corporate governance) ESG considerations across its portfolio to create value post-acquisition and invests in diversity, equity and inclusion (DEI) trainings, Zarin said.
The PE house has also grown the proportion of women in senior management roles by around 30% across its portfolio, he said.
In addition, its main asset EV Cargo had worked with Belgian beer producer and customer Anheuser-Busch InBev [EBR: ABI] to switch to sustainable fuels in its UK supply chains, said Zarin, who also serves as CEO at EV Cargo.
EmergeVest has a team of 18 in Singapore, Hong Kong, and the UK, according to Zarin.
by Jessica Wong and Eva Ng in Hong Kong
Source: Mergermarket