Singapore-based private equity firm Mandala Capital is preparing to launch its third fund in 2025 with a target of $250 million.
While the agribusiness and food-focused firm’s previous funds concentrated on India, Mandala Capital SSEA Food Fund (Fund III) will extend the firm’s geographical focus across South and Southeast Asia in response to growing opportunities in regional food security.
Mandala Capital investor relations manager Kim Cygler said Mandala hopes to support its portfolio companies to become leaders in their sectors.
“We strongly believe that the region can develop local sector champions that can be as big as the current international players within the value chain.
“This is due to the value we put in local knowledge and the strong local demand.”
Fund III will draw upon a mix of international investors including family offices and development finance institutions.
Mandala’s previous funds have attracted commitments including from the Teachers Insurance and Annuity Association of America and College Retirement Equities Fund, and the University of Texas/Texas A&M Investment Management Company.
Mandala did not disclose whether it has been communicating with any previous LPs around the new fund.
Despite food and agriculture employing a significant share of Southeast Asia’s population, Cygler said the sectors remain underinvested, while escalating geopolitical tensions are pushing countries to focus more on self-sustaining food systems.
According to UN projections, Southeast Asia’s population is set to grow from about 687 million in 2023 to about 790 million by 2050.
While increasing income and urbanization may drive higher demand for animal proteins in countries such as Vietnam and Indonesia, agricultural productivity has not been keeping pace, according to the World Economic Forum.
Through Fund III, Mandala plans to explore ways to meet this demand.
“We’ll focus a lot on adaptation,” Cygler said.
“Whenever you invest in agriculture and food, it goes hand in hand with climate change and trying to tackle those issues as well.”
The fund will focus on larger, later-stage companies in the upstream and midstream of the value chain.
“This is where we can add the most value, and that’s also where food security comes in.”
Control deals and exits
Fund III’s $250 million target is a step up from Mandala’s previous fund, Mandala Food Fund II, which closed in 2016 on $160 million ($230 million including co-investments).
Mandala’s first fund, Mandala Agribusiness Fund I, closed in 2014 on $115 million.
In 2023, Mandala also launched Mandala Innovation, a platform that aims to support early stage agritech companies.
Cygler said that as Mandala launched Fund II hot on the heels of Fund I, it has since been focusing on adding value to its portfolio companies and exiting them.
In August, Mandala made a full exit from its investment in Edward Food Research & Analysis Centre, one of India’s largest integrated laboratory testing service providers, in which Mandala invested $10 million in 2016.
Under Mandala’s ownership, EFRAC doubled its revenue and achieved a compound annual growth rate of more than 50 percent in EBITDA over the past five years.
“We worked with the management team to drive growth, to focus on increasing revenue while making sure that the company is cashflow positive as well.”
EFRAC marks Mandala Capital’s third exit in the past year, with its portfolio company Godavari Biorefineries also recently filing for an IPO.
It has also recently exited from Indian agriculture loan provider SAFL, in which it invested about $11 million last year.
While SAFL was a minority transaction, Cygler said Mandala structured its investment in a way that allowed it to secure some control.
However, she said Fund III will focus more on control deals than minority transactions.
“It is evident to us that control transactions have resulted in better performance, better governance, greater impact and more exits.”
