Navis was founded in 1998 in order to make private equity investments in buyouts, recapitalizations and financial restructurings in Asia. The firm contributes both capital and management expertise to a limited number of well-positioned companies with the objective of directing strategic, operational and financial improvements. The firm focuses exclusively on enterprises based in Asia, particularly South and Southeast Asia, where the principals of Navis have lived and worked for many years.
The firm manages several private equity funds, whose Limited Partners include a number of well-known US, European, Middle Eastern and Asian commercial and investment banks, pension funds, insurance companies, corporations, as well as a number of high net worth individuals and family offices. Navis has grown significantly since inception, and now has the largest private equity professional team in Asia, comprising 40 individuals, supported by 20 administrative staff, in six offices across the region.
Navis’ first investment was made in 2000. Navis has recently entered public equities investing with the launch of the Navigator Asia Fund. Navis participates in Cambridge Associates investment performance tracking survey and makes available its absolute and relative investment performance on request. The firm manages approximately US$2 billion in capital commitments.
Navis is one of the longest standing private equity groups in South and Southeast Asia. The Firm has steadily expanded its operations to capture investment opportunities by building a local presence across South and Southeast Asia. Retaining a focus on its core sector expertise, Navis has selectively invested in companies where it can develop synergies across its portfolio, or drive geographic expansion through its pan-Asian network. The General Partner believes that South and Southeast Asia provide attractive opportunities for private equity investing. The economies of our region have outperformed the US and Europe almost continuously for 30 years in terms of GDP growth. However, many of Navis’ target geographies are relatively immature, creating an underserved private equity market and leaving Navis with little competition. The pan-Asian and international funds with a focus on Asia have not been systematically creating deal flow in South and Southeast Asia to any large extent, instead targeting larger investments in North and East Asia (mainly Japan, Taiwan, mainland China and Korea).
Navis has one of the most established track records in Asian private equity. Since 2000, Navis has made investments in more than 41 acquisitions, of which 7 are follow-on acquisitions, yielding a return consistently in excess of the top quartile benchmarks in our industry.
Navis adopts a hands-on approach to its portfolio companies. As a result, in the case of Navis I/II where Navis’ impact has been felt the longest, approximately three-quarters of the value that Navis has created has been derived through increasing the profits of its portfolio companies, rather than through multiple expansion or financial leverage.
Navis targets established mid-market companies with leadership or near-leadership positions in their respective industry segments, typically with strong brand or market share potential. These companies often have strong, profitable foundations, but typically lack certain key attributes required to transition the company successfully to the next level of size, sophistication and geographic scope. Navis seeks to professionalize these companies and build scale through providing financial and intellectual capital as well as enhancing control through management, governance and system improvements. Such initiatives afford premium returns at exit.
The Navis Asia Navigator Fund
The Navis Asia Navigator Fund invests primarily in listed securities in Southeast Asia adopting a “private equity approach to investing in public equity”. Navigator was launched in August 2005.
Investment Philosophy: Navigator’s investment approach complements that successfully implemented by Navis in private equity investments – fundamentally research driven, value based and long-biased with a focus on smaller to medium sized enterprises. Navigator’s research process is hands-on and the Fund only invests in businesses where the investment team has met and is comfortable with the management. Navigator actively looks for sound businesses neglected by the markets, and seeks to leverage the substantial and broad investment experience of the Navis team in doing so. It is conservatively managed with relatively long investment horizon of 2-3 years or more. The portfolio is not bench-marked against any index, and is moderately concentrated, targeting only 10-15 investment positions (including cash) at any one time. Investment criteria include assessments such as:
- Is the industry analyzable by us?
- Are industry fundamentals attractive?
- Is the business attractively priced at current valuations?
- Is liquidity in the listed instrument acceptable?
- Are the levers of value creation in the hands of management?
- Is the Company a leader or near leader in its markets?
- Does it have a sustainable competitive advantage?
- Are the Managers / Owners competent and trustworthy?
- Is the capital structure appropriate for the business?
- What are the internally and externally-driven risks as assessed by Navigator?
- Are these acceptable? Can they be mitigated?
- Fund Structure: The Fund has a Cayman Islands domiciled, Master/Feeder structure with separate feeder funds for US and non-US Investors. The annual management fee is 1.5% of NAV, with a
- Manager’s incentive fee of 20% of the annual increase in NAV, subject to high water mark and minimum 5% performance fee trigger. The fund is open ended with monthly NAV valuations and subscriptions. Redemptions are quarterly and subject to 60 days notice, with some prudential limitations. There are no entry or exit fees.