MIC, Thai group to form $1-B investment fund
Maharlika Investment Corp. (MIC) is set to make its next major business move with an upcoming $100-million (P5.8 billion) investment in a billion-dollar private equity fund that it will create with Thai conglomerate Charoen Pokphand Group Co., Ltd (CP Group).
In a statement, the MIC, the state-owned startup managing the country’s sovereign wealth fund, said a memorandum of understanding (MOU) that it signed with the CP Group over the weekend would lay the groundwork for the establishment of the Fund, which is targeted to raise up to $1 billion in capital.
The rest of the money will come from the CP Group and other institutional investors that may be interested to join the Fund, MIC president and CEO Rafael Consing Jr. told the Inquirer in a text message.
Consing said the upcoming equity fund could be a potential source of future investments in the Philippines, particularly in the areas of agriculture, food production, digital innovation and green energy.
“This fund will be a primary vehicle for deploying capital into these targeted sectors, driving growth and supporting innovative businesses that contribute to the Philippine economy,” Consing said.
And that is where the partnership with the CP Group—and its industry expertise—will come in handy.
Investment strategy
Founded in 1921, the Bangkok-listed group is controlled by the family of Thai billionaire Dhanin Chearavanont and is one of Asia’s largest multinational conglomerates, with interests in agriculture, food production and retail, among others.
Last year, the CP Group committed to make an investment of $1.5 billion in the Philippines, starting with a 10,000-hectare modernized mega farm, according to the government. That is on top of the $2 billion that the company had promised to invest in the country’s poultry and swine industries during President Marcos’ trip to Bangkok in 2022.
According to MIC, a steering committee will drive project selection, fund structuring and investor engagement for the planned equity fund, with the first capital close expected within the next nine to 12 months.
Its $100-million contribution to the Fund would mark another major business deal for the MIC, whose maiden investment involved the purchase of a 20-percent stake in the National Grid Corporation of the Philippines (NGCP), the private company operating the country’s lone electricity transmission network.
Consing said the deal, valued at P30 billion, will safeguard the nation’s power supply from external threats and disruptions, citing the need for the government to have a say in NGCP decisions.
Moving forward, the MIC boss said the equity fund that will be formed with the help of the CP Group will consider both brownfield and greenfield investments.
“We’re not limiting ourselves to one or the other. A brownfield investment, where we’d be investing in an existing business, could offer quicker returns and established operations,” he said.
“A greenfield investment, on the other hand, where we’d be supporting a new project or venture, might offer higher growth potential and the opportunity to shape the business from the ground up,” he added.
“Ultimately, the decision will depend on a careful assessment of each opportunity, considering factors such as risk, return potential, and alignment with our investment objectives,” Consing continued.
