Saratoga Capital says it hopes to come back to the markets in late 2010 to raise a second private-equity fund. The Singapore-based manager's first fund runs $152 million, which -- if all goes according to plan -- should be 50% invested within the next two months and fully invested by the third quarter.

The firm is doing deals in chunks of around $30 million for the original fund. Once that milestone has been achieved, it should be feasible to get going on a second fund by the fourth quarter. Plans are still tentative, but Saratoga hopes the new vehicle can be twice the size of the initial fund or bigger.

The 10-year-old first fund is achieving its target of a 25% internal rate of return. It is already invested in palm oil and coal mining in Kalimantan, Borneo. The palm oil exposure is through a 51% stake in Global Kalimantan Makmur, an unlisted palm oil producer that grows its trees on a 10,000 hectare plot, but may expand it to 25,000 hectares in due course. The coal position was done via a pre-IPO equity deal with domestic group Adaro Energy, which operates a giant open pit coal mine in Borneo 13 kilometres long by 1 kilometre wide and 300 metres deep.

"Natural resources remain our main focus, though we are looking also at consumer and infrastructure plays," says Kay Mock, one of Saratoga's founding partners, who splits his time between Singapore and Jakarta. "Manufacturing in Indonesia hasn't developed so much in recent years, due partly to vague labour laws put in place during [former president] Megawati's time [July 2001 to October 2004], and ground has been lost to Vietnam and China."

While Indonesia offers the best conditions globally for growing timber, processing of resources is difficult in the country, which now even imports plywood from China. Infrastructure is part of the problem, and Indonesia's infrastructure is being developed at a snail's pace. Road infrastructure is growing at a measly 1% a year. Although Saratoga is interested in infrastructure projects, such as toll roads, it says it's unlikely to participate in greenfield infrastructure deals.