bloom.CAPITAL establishes open-ended fund for Global Health & Safety sector focus
Singapore based bloom.CAPITAL has established an open-ended, 'permanent capital' vehicle to raise funds for long-cycle investments within the global health & safety sectors.
bloom.CAPITAL, the Singapore-based private equity (PE) fund manager, has established an open-ended fund, also known as a 'permanent capital vehicle' or 'evergreen fund', to invest in long cycle industries involved in addressing health and safety solutions across global markets.
Bloom launched the new fund for investment opportunities in the health and safety sectors which has seen upward trending stability throughout the pandemic and is expected to experience solid growth over the next decade as nations and municipalities invest for preparedness against future risks, including climate change, and in Asia in particular where the rate of urbanization, education gains, and relative young age populations are greater than in other regions.
Named the 'Global Safety Fund', it is a culmination of the deep experience of its leadership in the public service industry, its intimate knowledge of Asian markets, and the fund manager's expectations that stable, relatively lower risk returns will be preferred by institutional and corporate investors to the rapid yet largely unpredictable growth rates of tech-leaning sectors that was experienced during the COVID-19 pandemic. "The back side of the COVID-effect is yet to be seen, when people around the world begin returning to the workplace and presumably use digital meetings and e-commerce much less than they did during the surge of 2020 that led to eye-watering valuations of many companies." explained Zachary Allen, co-founder of bloom.CAPITAL.
The past two decades have shown macro economic cycles that have squeezed the margins of many sectors and their ability to react to parallel gravitational shifts in demand from mature, stagnant markets in the west to rapid growth markets in the east which have proven much less conservative than their core markets in their adoption of innovative technologies. "After vaccinations become more widespread and the efforts of scaling up the response become less challenging and more of a stable regularity, we expect demand shift towards strengthening governmental and non-governmental response capabilities for future crises so we're not again caught completely flat-footed as we were in 2020." Allen went on to say that a well-positioned long-term focus acquisition strategy, with solid management and a strong plan to evolve to meet the changing shapes of demand in both design, mission, and locus of innovation will be able to capture high rates of growth that are atypical in the target sector.
Within the target sectors, the 7-10 year horizons that are typical in the PE industry are simply mismatched with the normal cycles of these asset types and lead to non-optimal exit schedules, ultimately reducing ROI for investors. Health and safety sectors are continuous industries, and due to the involvement of government procurement and regulatory approvals in G2M strategies the open-ended fund structure is a win-win for companies and investors.
Innovation in fund structure is lacking in the PE industry. Most PE funds use a common template for defining GP/LP relationships. Allen added, "At the end of the day, LPs want superior returns to support their overarching investment strategy. Beyond returns, LPs desire liquidity options. Whether it is the ability to exit when they need, or desire to stay in or even double down with a fund manager they have learned to trust. Only open-ended funds can give this flexibility."
bloom.CAPITAL is continuing a recruiting drive through Q4/2021 to seek top talent to coincide with the fundraising of the Global Safety Fund.