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A new private equity platform ALTUS Digital Capital (ADC) formally made its debut in the Philippines focused on investing in native digital companies in emerging markets in Southeast Asia.
ADC is a division of ALTUS Capital Partners, a partner company of International Finance Corp (IFC), the private lending arm of the World Bank.
Led by its co-founder and managing director Randy McGraw, ADC last week opened its headquarters in the financial district of Makati City. The firm focuses on the TMT (technology, media, and telecoms), fintech, and e-commerce sectors in the region.
In an interaction with DEALSTREETASIA, McGraw explained ADC is an owner-operator model of private equity firm, which considers backing a business or market problem that needs to be addressed, and that the firm was looking to partner with managements of companies to apply both its capital and digital activation platforms, to solve the problems the companies faced, and also to enhance revenue and earnings growth.
Although he declined to disclose the vehicle size, McGraw said they pay attention to the sub $20 million level which he describes as “anathematic” to most PE firms. “A great deal of opportunity in emerging markets resides at the sub-$20 million level, a level at which many PE firms won’t participate,” McGraw said. “There’s a ton of opportunity in the digital sector in emerging markets, but you must be willing as a firm to get your hands very dirty as there are significant pain points overall that hold back digitalization.”
He said ADC will look at established companies in need of a “digital expression”, and added that the PE firm will look to apply its digital activation platform to the equation to make the investment thesis pop.
Operating in beta mode in 2016, ADC has made three significant investments and is in varying stages of closing three more in 2017. Its first two organic investments ― M2 Media Pte Ltd, and GoSPCE Pte Ltd ― both exceed $500,000.
M2 Media integrates rich community and social elements with UGC & PGC and targeted e-comm, while GoSPCE does its own approach to shared living space for shared work and shared play space.
“A lot of value remains locked in emerging markets, because the key to unlocking it is way outside simply applying financial capital – in the digital sector in particular, its often as simple as the inability to build the proper digital strategy or activate it properly with existing in-house skill sets. Hence, we built our digital activation platform,” McGraw added.
ADC has a satellite office in Singapore and is currently in search for a country manager in Thailand.
Aside from financial professionals, DC continues to grow its team of 65 professionals with skills in digital marketing, software development, and Digital BFA (business & financial analysis) that it actively applies to solving the problems encountered in the development and execution of digitalization investments.
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