ADM Capital garners $178m for Asia lending fund II

The firm’s investor base includes the IFC and Overseas Private Investment Corporation.

ADM Capital, a Hong Kong- and London-headquartered private capital manager, has garnered $178 million for its second Asia-focused lending fund, Asia Secured Lending Facility II, the firm announced.

Fund II’s investor base includes the Overseas Private Investment Corporation, a state-backed development finance institution in the US, and Calvert Impact Capital, a non-profit investment firm.

ADM Capital’s secured direct lending strategy targets mid-market corporates across Asia-Pacific with a typical loan size ranging from $20 million to $50 million per transaction, according to Christopher Smith, head of investor relations and business development at the firm.

The second fund in the series for the firm’s direct lending strategy, Fund II is a follow up vehicle of ADM’s first Asia-focused secured lending facility, ADM Capital Somei Lending Platform, which held a final closing on $123.5 million, according to PDI data.  Among investors in the fund, International Finance Corporation (IFC), committed $50 million in 2016.

“The ASLF II mandate extends across emerging Asia, and borrowers are generally seeking expansion capital across various sectors in situations where capital from traditional financing channels is inappropriate or unavailable,” Smith told PDI.

The fund is looking mainly at China, Indonesia and Thailand as well as several frontier markets, including Cambodia, Myanmar and Mongolia.

In Asia, ADM Capital seeks to support growing Asian businesses and provide credit in markets where its availability is scarce, added a spokesperson from the firm.

“ADM Capital has the flexibility and expertise to provide completion, growth, special situations or restructuring finance. Banks may be unable to move quick enough or be willing to take overseas risk in cross-border transactions. It can be a completion finance or it can be a company in China looking to acquire the [investment] target,” said Scott Emmerson, investor relations and marketing associate at ADM Capital.

PDI understands that Fund II is targeting mid-teen percentage returns on an unlevered basis. The main strategy of Fund II includes making bilateral loans to borrowers directly or acting as a sole lender to borrowers. Fund II has an eight-year fund life with a six-year investment period. Fund I invested about 2.5 times of the committed capital to the fund. Fund II had made seven investments as of September 2018.

ADM Capital has approximately $1bn under management in Asia Pacific.