Swedfund, Sweden’s development finance institution, has committed $15 million to Navegar Fund III, a Philippines-focused private equity fund that backs mid-sized companies, as it seeks to support private sector expansion and job creation in the country.
The investment will provide long-term growth capital to mid-sized businesses in sectors including healthcare, food distribution, logistics, and consumer and business services, helping them expand operations, strengthen governance and create more formal employment, Swedfund said on Wednesday.
“Creating more productive and formal jobs is essential for inclusive economic development. By helping growing businesses access the capital they need to expand, this investment aims to strengthen the private sector and contribute to sustainable job creation in the Philippines,” said Helen Hagos, investment director for Food Systems & Strategic Investments at Swedfund.
Swedfund said many small- and medium-sized companies in the Philippines continue to face difficulties securing long-term financing despite the country’s steady economic growth. Around 70% of the workforce remains employed in the informal sector, where jobs often lack stability, social protection and opportunities for skills development.
According to the development finance institution, expanding access to capital for mid-sized companies will help businesses formalise their operations, strengthen domestic value chains and improve access to essential goods and services across the country.
The investment also forms part of Swedfund’s thematic fund investment strategy and expands its exposure to Southeast Asia.
In December last year, Swedfund said it will invest up to $20 million in Vietnam’s EVF General Finance JSC (EVF), a financial services provider for MSMEs. The Swedish investor also invested $15 million last year in Excelsior Capital Vietnam Fund II to boost Vietnamese private sector development and growth.
Navegar Fund III, managed by Manila-based Navegar, has a target of $250 million. The fund provides long-term capital alongside active ownership to support the growth of mid-sized Philippine companies operating in key sectors of the domestic economy.
Navegar III is targeting investments between $30 million and $50 million in companies in the Philippines across various sectors, including but not limited to consumer, healthcare, logistics, and business services. The predecessor fund, Navegar II, closed in 2020 at $197 million, exceeding a $150-million target. Fund I, which had a total capital commitment of $120 million, has been fully deployed.
Navegar’s portfolio includes hard discounter DALI, Great Deals E-Commerce Corp, TaskUs, The Bistro Group, Intellicare, Bo’s Coffee, Cloudstaff, and MDiNovare, according to its website.
In February, DealStreetAsia reported that LeapFrog Investments has partnered Navegar to take a significant minority stake in Global Care Medical Center (GCMC), which operates hospitals in so-called Tier 2 to Tier 3 cities outside of Metro Manila. The hospital group is looking to expand across the Philippines amid strong demand for accessible healthcare services.
