Astra Partners Sdn Bhd (Astra Partners) is a venture capital management company licensed by the Securities Commission of Malaysia to provide venture capital fund management services in Malaysia.
Astra Capital was awarded RM25 million under MAVCAP’s OSP2. Its matching partner, Kumpulan RZA Sdn Bhd contributed another RM3.5 million whilst the Manager contributed RM1.5 million for a total fund size of RM30 million.
The fund is intended for investment in high-growth companies involved in ICT and to achieve an above average rate of return in capital appreciation via private equity investments in established businesses in the ASEAN region. Investment criteria for companies include successful track record and good growth potential, strong and experienced management team, clear exit strategies, proven market concept, ownership of IP of commercial interests, as well as good growth prospects and scalability.
The Fund seeks to benefit from the confluence of economic trends favoring healthy growth within the Asean region. In addition to seeking outstanding investment opportunities primarily in private companies in Asean but predominatly in Malaysia, the Manager will develop proprietary deal flow through active dialogue with industry and other VC/PE players. The general investment horizon for each investment will be between 3 to 5 years from disbursement to exit. While IPOs will continue to be an ideal exit mechanism, trade sales and mergers into existing listed entities will be preferred choice of exit.
The Fund deal flow is expected to come primarily from Malaysia, Singapore, Indonesia, Thailand, Philippines and to lesser extent Vietnam and Cambodia. Greater China, Korea and Japan will be considered mainly for strategic reasons such as partnership network, market access or even exit opportunities.
Investment Focus – The Manager will remain focus in three main areas of investment opportunities.
1) Providing expansion capital for expansion and/or late stage deals with strong opportunity for growth;
2) Providing capital for consolidation of businesses within the region to create a bigger and stronger entity with good regional presence; and
3) Providing capital for Malaysian companies to expand overseas either in the form of organic expansion or through acquisitions.
Investment Approach – The Manager intends to be hand-on and active investor adding strategic value creation, operating guidance and provides access to its portfolio companies and industry networks. The Manager believes in growing the value of all its portfolio companies from the day of investment and will keep doing so until it exits from the portfolio companies. The Manager intends to keep it investment focus and approach within its core investment approach as follows:
Investment Stage – The Fund will invest in businesses with strong management team and established operations that range from expansion stage to late stage. It does not invest in start-ups.
Geographic Focus – The Manager will focus its investment primarily in Malaysia and Asian countries.
Transaction Size – The size of each investment will be in the range of RM5 to RM15 million and will typically represent between 10% to 30% ownership in the targeted companies. However, the transaction size can only be finalized based on the Fund Size at the final closing date of the Fund.
Investment Framework – Since the Fund will be taking minority positions in portfolio companies, the Managers will ensure that the following criteria are met:
1) Exceptional management teams with impeccable track record and integrity; and
2) The credibility of other major shareholders
Investment Criteria – In evaluating investment opportunities, the Manager will study key aspects of prospective portfolio companies, including:
1) The management of investee companies must have proven track records of leadership and operating expertise, in-depth business understanding, good vision, strong team interaction, and dynamic.
2) Barrier to entry which can enable the company to build sufficient lead time over potential competitors. Such barriers to entry can come in the form of technology (IP), capital, market access etc.
3) High growth potential both in terms of revenue generation and/or profit contribution.
4) Exit potential, either via IPO or trade sale, within 3 years from date of investment.