L Capital Asia, the LVMH Moët Hennessy Louis Vuitton-backed private equity firm that invests in affordable luxury brands across developing Asia, has closed a second fund and plans to orient part of its strategy towards investing in Asia’s wealthier countries.
Singapore-based L Capital Asia began raising capital for the second fund, which is valued at $950 million, in March and closed it last week. It did not disclose the names of the second fund’s investors, but said they included “sovereign wealth funds and pension funds based in North America, Europe and Asia.” Other known sponsors of L Capital Asia include Groupe Arnault SA, LVMH chairman Bernard Arnault’s family holding company, and YTL Corporation Berhad, the Malaysian conglomerate.
The second fund’s debut investment was in Marubi Holdings Group, a Chinese cosmetics maker.
Ravi Thakran, L Capital Asia’s managing partner and LVMH’s South and Southeast Asian president, attributed the fund’s popularity — it had originally intended to raise $800 million — to its focus on brands that cater to Asia’s emerging middle-class masses and its ability to leverage LVMH’s contacts with industry players. The latter play has allowed companies that L Capital has stakes in to cut better deals with suppliers and real estate landlords. “We have stuck to the basics that we outlined when we launched the business in 2009, and have delivered on all promises, with our portfolio companies being the biggest champions of our development,” said Thakran.
The firm invested the $637 million raised in its first fund, which closed in December 2010, in 13 companies. It has since exited two of them. Much of its capital has been spent on Chinese, Indian and Southeast Asian brands in the fashion and lifestyle sectors, though it has since acquired substantial stakes in Jones the Grocer, the Australian food emporium, and R.M. Williams, the Australian bush wear manufacturer. While L Capital will continue focusing its efforts on developing markets, it said that it would also consider investing “on a more opportunistic basis [in] businesses in developed Asia (e.g. South Korea and Japan), particularly where such businesses may benefit from expansion into developing Asia.”