jones the grocer

Expect LVMH to dip their toes in further investment in Australia and New Zealand.. That’s the word from Singapore-based L Capital Asia managing partner Ravi Thakran who was in Australia recently talking to The Wall Street Journal.

Luxury group LVMH back private-equity firm L Capital and recently raised $US1 billion for its fifth fund, which is its second dedicated to investments in the Asia Pacific region. The fourth fund was exhausted last month after the $US640 million purchase of a stake in Australian retailer R.M. Williams.

Thakran predicts that a possible American fund could be launched within the next year, with most of their focus on Europe and Asia at present. Due to the current opportunities in Asia, L Capital has allocated more money to the Asia funds, compared to the European funds.

“The nations in the Asia Pacific feel like they’re running on a treadmill, they’re moving fast. With China growing at around 7 per cent a year, India at around 6 per cent and Southeast Asia at around 5 per cent, we like the theme that these nations will continue to be the factory of the world,” Thakran said.

Even with the slowdown in China, the equity firm still see China as a place to be.

“Chinese entrepreneurs know how to manufacture almost everything and anything, they do it for everyone else at a reasonable price but when they’re doing it for themselves it’s an even better margin. They know their market and consumer better than anyone but they lack the knowledge of how to build brands. They have a basic idea, and often have a local celebrity ambassador, but they realise our execution and finesse can make a significant difference. I believe the day Chinese entrepreneurs understand the complete brand-building process, they’ll be world conquerors.”

Thakran confirms that L Capital will aim to spend between 45 and 50 per cent of the new fund in China. Whilst they aren’t looking to invest directly in Chinese companies, they will look to build their current investments in the region. But that isn’t the case with all their investments… With the recent stake acquisition in R.M. Williams, L Capital are looking to forgo China at first in place of the North American, British, Japanese, Korean, South American markets before looking at the Middle East, China and Southeast Asia.

Whilst Asia still promises much opportunity, L Capital has identified Australian and New Zealand food and beverage companies as the ones to watch.

“Australian and New Zealand food and beverage companies have an incredible reputation in places like China which face major food-security issues. A natural advantage is the huge number of international students, specifically from China, who come to Australia young and impressionable and return home as ambassadors for a different quality of life, with a view on anything from milk to fresh produce.” Thakran said.

To date, L Capital has invested in jones the grocer and burger joint Charlie & Co., both which  have expanded into Southeast Asia and soon to be launched in the United Arab Emirates.

By Cassandra Murnieks

Follow MO Luxury’s Facebook page for more luxury news…