Indonesian private equity firm Novae Capital Partners has secured the first close of its debut fund at $100 million, a top executive told DealStreetAsia.
It plans to close the vehicle at $150-200 million by end-2025, said the firm’s managing partner Elliott Setiawan in an exclusive chat.
Approximately 60% of the fund’s capital is earmarked for Indonesia, while the rest will be directed towards Southeast Asia with an increased focus on Vietnam, said Setiawan.
Novae Capital Partners was founded in 2024 by Aaron Nio, Nicholas Umar, and Setiawan. Its investment strategy is to target mid-market deals, with ticket sizes ranging between $10 million and $30 million, and an average cheque size of around $20 million. The fund’s focus sectors include consumer, healthcare, education, and industrial/services businesses.
Setiawan explained that Novae’s competitive edge lies in its deep focus on Southeast Asia, “We are focused on the mid-market, which makes up the larger pool of businesses in the region and is less addressed, hence we see a healthy deal pipeline in the $10-30 million ticket range.”
The firm has already made two investments—Island Brewing, a Bali-based craft brewery, and Centre Park, a Jakarta-based leader in smart mobility and parking solutions. Novae plans to make two more investments, in education and healthcare, in the next few months.
Charles Oentomo, President Director and Founder of Centre Park Indonesia, said: “While Novae is a newly-established fund, our relationship spans nearly a decade, built on trust and shared values. Together, we aim to accelerate the company’s growth by leveraging technological advancements, driving more efficient and intelligent urban mobility solutions.”
Setiawan was formerly an investment director at the sovereign wealth fund Indonesia Investment Authority (INA) and vice president at Affinity Equity Partners, where Umar also had a stint as VP-Private Equity. Aaron Nio was formerly a managing partner at Foremast Ventures and a senior investment associate at Monk’s Hill Ventures. Umar and Nio are partners at Novae.
“We’ve built time-tested relationships as we have been in the market for quite some time. This allows us to execute relatively quickly some deals that were out of scope in our previous roles,” said Setiawan.
Novae believes its experience with larger funds, hands-on approach, and long-standing relationships give it an advantage in sourcing and executing deals.
While focusing on mid-market deals offers Novae flexibility in its investment pipeline, the firm acknowledges the liquidity challenges in Southeast Asia’s private equity space. Setiawan and Umar emphasised the importance of providing Distributions to Paid-In (DPI) to maintain investor confidence.
“We are laser-focused on building a track record of successful deployments with a clear exit and alignment framework,” said Umar. “Liquidity and exits remain a challenge across all ticket sizes, but with mid-market investments, and being a first fund, we need to emphasise this further, demonstrating value creation and realising returns.
According to Umar, while entry into mid-market deals can be tough, the exit landscape remains even more difficult across all geographies and ticket sizes in Southeast Asia. “For funds of our size, it’s crucial to prove DPI and ensure our strategy delivers strong returns in a competitive environment,” he said.
So far, Fund I’s investors (or limited partners in industry speak) are primarily family offices and high-net-worth individuals (HNIs). However, Novae Capital is working to expand the base of its limited partners and bring institutional investors into its fold for its next round of fundraising.
One of the firm’s LPs, who did not want to be named, said, “We have known the individuals behind the fund for quite some time. Reputation, relationship, and trustworthiness were the primary reasons we supported Novae Capital Partners.”
Experts DealStreetAsia spoke to said the fundraising and strategic focus of Novae Capital is a positive for Indonesia’s investment landscape. Homegrown funds will instil confidence in the country’s potential as a key destination for private equity in Southeast Asia.
Equity dealmaking in Indonesia has now been decelerating for 11 quarters on the trot, according to data from the recent DealStreetAsia DATA VANTAGE report Mapping SEA & Indonesia’s 2024 Journey.
Indonesian startups recorded a mere 13 deals in Q4 2024—the lowest quarterly deal volume in over six years. They raised a combined $59.2 million, the second lowest in at least six years, according to the report.
Source: https://dealstreetasia.com/stories/novae-capital-first-close-426069
