Hong Kong’s VIAM launches evergreen fund

The vehicle, which features an innovative liquidity structure, provides financing to encourage growth and ESG improvement at corporate SMEs in the Asia-Pacific region.

VI Asset Management, a Hong Kong-headquartered asset manager, has launched its first evergreen private credit fund with a minimum of $30 million in seed capital commitments from the firm, senior management and third-party support. The firm is aiming to raise around $500 million for investment over the medium term.

The fund allows investors to place 100 percent of their commitment into the fund upon subscription, versus having capital drawn down through a series of capital calls, and then leave it to be continually invested until the investor wants their capital returned to them. When the investor wants capital returned, they stop participating in new deals and their capital starts returning to them when the underlying positions in the portfolio exit.

Sam Clothier, executive director of business development at VIAM, told PDI that investors see the benefit of an evergreen fund structure in private debt as it allows for the immediate and full deployment of their capital into a fund while lessening the administrative burden of a number of tasks such as capital calls, idle cash waiting for capital calls and fund re-ups.

The focus of the fund will be mainly on developed markets in Asia-Pacific – such as Australia, Hong Kong, Singapore and Japan – with the possibility of opportunistic exposure to emerging markets. Target businesses – which are expected to be well established and offer competitive advantages – will typically have EBITDA in the range of $10-50 million, which Clothier believes tend to be overlooked by larger private credit fund managers operating in Asia-Pacific.

Clothier said the firm believes its core focus on the corporate space is a differentiator given that many funds in the region allocate into real estate. By contrast, VIAM is likely to have less than 20 percent of its exposure in that market. He describes VIAM’s offering as providing “transitional capital”, allowing investee companies to fulfil growth ambitions as well as show some form of ESG improvement.

He adds that many SMEs in the region do not have dedicated in-house ESG capabilities so are effectively fertile grounds for ESG improvements. Firms may be provided with financial incentives in the form of lower interest rates for meeting targets.

VIAM completed its first investment from the fund in Hong Kong-based Neo-Concept Group, a female-owned and led sustainable fashion designer and manufacturer for international brands and retailers, to finance growth and sustainability initiatives. The company has achieved multiple industry sustainability certifications.

As reported exclusively in PDI, VIAM launched its private credit business in July with the appointment of Roger Moh as managing director and head of capital solutions. Moh brought with him Clothier, managing director and general counsel Kit Mak and associate Steven Chan from Hong Kong-based fund manager, EmergeVest.