L Capital Asia to invest $650 m in Asia

Thursday, 12 May 2011

Upcoming consumer firms in India have good news coming their way, along with similar companies in China and other buoyant Southeast Asian countries. Backed by the number one luxury brand’s holding company LVMH, L Capital, a private equity manager, recently launched a $650 million private equity fund that will invest in consumer firms based in China, India and Southeast Asia. The fund, called L Capital Asia, will buy minority stakes in promising companies engaged in retail, food and beverage, and beauty and wellness. L Capital Asia is the fourth fund by L Capital, whose best-known investments include Pepe Jeans, Gant and Princess Yachts.

L Capital will not deal with French parent LVMH, the world’s largest luxury goods firm, to avoid any perceptions of conflicts of interest. They’ve defined in their constitution that they will never buy anything from LVMH nor will they sell to LVMH, informs Asia managing partner Ravi Thakran, who is also LVMH’s group president for South and Southeast Asia and the Middle East. "We do not want to be perceived at any point in time that we’re shifting from the left pocket to the right pocket."

The fund expects to invest $200 million this year, and will announce one Chinese and one Indian fashion company investment within the next 60 days, says Thakran. He also said the Asia fund has to-date invested about $90 million in three firms -- Singapore luxury timepiece retailer Sincere Watch, Singapore shoe label Charles & Keith, and Hong Kong-listed Emperor Watch and Jewellery. L Capital said its investments in Asia, through a $650 million fund, are expected to outpace returns of those in the US and Europe. With Europe and America facing anaemic growth, private equity players investing in retail are looking for the opportunity they need in Asia. L Capital Asia is looking for minority investments in regional consumer brands with what it calls value-for-money and aspirational qualities.