Correction: The companies have corrected the total planned investment amount to US$500 million.
Investcorp, China Resources and Fung Investments’ Fung Strategic Holdings have launched a private-equity platform with US$500 million in committed capital to invest in food brands in Singapore, China and greater Southeast Asia, the companies said in a statement Thursday.
The platform will focus on China’s highly fragmented food sector, the statement said. Investments will focus on fast-growing businesses expected to have higher margins and defensive franchises as well as premium brands in niche sectors, such as condiments, packaged foods and healthy snacks, the companies said.
The companies noted China is the largest and fastest-growing consumer market globally, with around 120 million households set to become middle-class consumers over the next decade.
“China provides a potential ‘once in a generation’ surge in domestic consumption growth. This trend is also supported by Chinese millennials spending more money and seeking new, more premium and healthier brands,” the companies said.
Hazem Ben-Gacem, co-CEO of Investcorp, said in the statement the alternative investment manager has been actively expanding into Asia to diversify its investments.
Investcorp, which had US$28.2 billion in assets under management as of end-June, has invested in food sectors across the U.S., Europe and Middle East and North Africa, the statement said. Its investments include Saudi Arabian hypermarket group Bindawood Holding, Turkish red-meat processor Namet and North American convenience store chain Circle K, the statement said.
The Fung Group’s core businesses are in the global supply chain for consumer products, including sourcing, logistics, distribution and retail.
“Fung Strategic is focused on developing the food sector with the backing of the Fung Group’s global supply chain capabilities.,” Monica Tsui, managing director of Fung Investments, said in the statement.
China Resources (Holdings) is a holding company with brands across sectors including food and beverage, retail and distribution and real estate, the statement said.
“Investcorp is the only private equity investor who has invested in the food sector across four continents, and Fung Group has a rich history and heritage in export trading and global supply chain management,” Carl Qin, CEO of China Resources Capital Management, said in the statement. “Their unique experiences give us confidence that we have the right partners in our quest to address a significant market opportunity.”