52017-001: Exacta Asia Investment II, L.P. | Asian Development Bank

Regional: Exacta Asia Investment II, L.P.

Nonsovereign (Private) Project | 52017-001 Status: Approved

The Fund aims primarily to deploy growth equity in lower middle-market companies (enterprise value of $25 to $125 million) in Southeast Asia (SEA): Indonesia, Malaysia, Philippines, Singapore, Thailand and Viet Nam. Exacta is one of the few pure-play Southeast Asia growth equity funds currently in the market. The general partner (GP) is the successor to Mizuho ASEAN Investment GP, and benefits from relationships with corporate Japan via Mizuho Financial Group. Mizuho Bank, Ltd is acting as an anchor, investing up to $100 million on a pari passu basis with other limited partners (LPs). The Fund aims to create value-addition and potential exits by way of Japanese and ASEAN angle strategic initiatives.

Project Details

Project Officer
Teo, Yee Hean Private Sector Operations Department Request for information
Country
  • Regional
Sector
  • Finance
 
Project Name Exacta Asia Investment II, L.P.
Project Number 52017-001
Borrower/Company Exacta Asia Investment II
Country Regional
Indonesia
Malaysia
Philippines
Singapore
Thailand
Viet Nam
Location Indonesia - Nation-wide; Malaysia - Nation-wide; Philippines - Nation-wide; Singapore - Nation-wide; Thailand - Nation-wide; Viet Nam - Nation-wide
Type or Modality of Assistance
Equity Ordinary capital resources USD 25.00 million Approved
Strategic Agendas Inclusive economic growth
Drivers of Change Partnerships
Private sector development
Sector / Subsector

Finance / Infrastructure finance and investment funds

Gender Equity and Mainstreaming No gender elements
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Private Sector Investment Funds & Special Initiatives Div
Responsible ADB Officer Teo, Yee Hean
Project Sponsor(s)
Description The Fund aims primarily to deploy growth equity in lower middle-market companies (enterprise value of $25 to $125 million) in Southeast Asia (SEA): Indonesia, Malaysia, Philippines, Singapore, Thailand and Viet Nam. Exacta is one of the few pure-play Southeast Asia growth equity funds currently in the market. The general partner (GP) is the successor to Mizuho ASEAN Investment GP, and benefits from relationships with corporate Japan via Mizuho Financial Group. Mizuho Bank, Ltd is acting as an anchor, investing up to $100 million on a pari passu basis with other limited partners (LPs). The Fund aims to create value-addition and potential exits by way of Japanese and ASEAN angle strategic initiatives.
Objectives and Scope An investment in Exacta II is in line with ADB''s goal to address the unmet demand for private sector financing in Southeast Asia. Through this investment, ADB will help finance comparatively small to medium-sized companies in the region. Exacta II also aims to increase business efficiency, labor productivity, and overall employment. ADB's participation will, therefore, support the development of the private sector in countries where equity-related financing is limited and access to bank financing is difficult without hard assets as collateral. Moreover, through Exacta, ADB will foster regional cooperation through the knowledge transfer from Japan to Southeast Asia.
Linkage to Country/Regional Strategy Exacta II's investment goals align strongly with ADB strategies to enhance the efficiency and transparency of equity markets, removing barriers to financing for small and medium-sized enterprises, and promoting social and inclusive growth. Exacta II's investments are also consistent with ADB''s plans for financial sector operations, which prioritize the need to enhance access to finance for small and medium-sized enterprises as part of the sector development agenda and the need to support the three pillars of the real economy: households, SMEs, and infrastructure. Exit strategies such as IPOs and trade sales will also help develop the local capital markets in the region.
Safeguard Categories
Environment FI
Involuntary Resettlement FI
Indigenous Peoples FI
Summary of Environmental and Social Aspects
Environmental Aspects The potential environment and social impacts and risks associated with the fund's existing and/or likely future portfolio, its existing ESMS and its commitment and capacity for implementing the ESMS, have been assessed. The ESMS requires appraisal and management of investments in accordance with applicable national legal and regulatory requirements, internationally recognized standards, and other applicable industry specific guidelines. The ESMS requires the screening of investments against an exclusion list equivalent to ADB's Prohibited Investment Activity List. While potential fund investee's business activities are not expected to require major infrastructure development or generate significant, adverse, irreversible or diverse environmental impacts, the ESMS includes adequate procedures and requirements for screening, assessing, reviewing, implementing and monitoring investments that may be assessed as category A for environment. ADB provided guidance to Exacta to enhance its existing ESMS to ensure compliance with ADB's Safeguard Policy Statement. Exacta will adopt the enhanced ESMS before ADB's first disbursement. Investment risk screening and categorization and due diligence findings will be included in the fund investment committee proposal. Exacta will ensure that any corrective actions required to be undertaken by the investee are achievable, time-bound and agreed upon prior to the final investment decision. Exacta's environmental and social team will supervise all investees against environmental and social risks and any agreed time-bound action plans; and report the performance annually to ADB.
Involuntary Resettlement The fund's existing and future portfolios are expected to be located within leased properties. If in case investment activities will require land acquisition or purchase of land, investees are not expected to have recourse to government expropriation and all transactions are expected to be on commercial terms on a willing buyer willing seller basis. The fund manager has an existing ESMS with an adequate procedure to screen investee business activity for potential involuntary resettlement impacts and will consult ADB early in its investment appraisal process for concurrence of proposed due diligence.
Indigenous Peoples Potential fund investments are not expected to adversely or beneficially affect distinct and vulnerable Indigenous Peoples communities. The existing ESMS also has an adequate procedure in assessing potential investments that may affect the dignity, human rights, livelihood systems, or culture of ethnic minority groups, or affects the territories or natural or cultural resources that such groups own, use, occupy, or claim as an ancestral domain or asset.
Stakeholder Communication, Participation, and Consultation The private commercial nature of investments limits the opportunities for stakeholder engagement. Conduct of consultation in relation to investees business activities, if required, will be carried out in accordance with applicable national laws and regulations and the Safeguard Policy Statement of the Asian Development Bank.
Timetable for assistance design, processing and implementation
Concept Clearance 06 Mar 2018
Credit Committee Meeting 30 May 2018
Approval 12 Jul 2018
Last PDS Update 26 Jul 2018

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