OSK Ventures International Bhd (KL:OSKVI) and Affin Hwang Investment Bank Bhd have launched a venture debt fund for sophisticated investors.

Pothos Fund I, launched through Pothos GP Sdn Bhd, has a three-year investment tenure.

Pothos GP is the fund manager and a subsidiary of OSKVI, with strategic equity participation from Affin Hwang. It focuses on providing growth capital to high-potential companies across Southeast Asia.

The fund aims to give sophisticated investors access to an alternative asset class that has traditionally been available only to large institutional investors, while supporting high-growth companies across the region.

Pothos Fund I aims to deliver attractive risk-adjusted returns through a combination of contractual income streams, downside protection features and selective equity participation.

Unlike traditional venture capital funds, which focus primarily on equity investments, Pothos Fund I adopts a structured venture debt strategy. It will target revenue-generating businesses with proven business models, strong management teams and predictable cash flows that are poised for regional expansion.

It also seeks to address a funding gap in Southeast Asia’s rapidly evolving innovation ecosystem by providing debt-equity hybrid financing to high-growth companies.

Through venture debt financing, the fund will enable these businesses to extend their operational runway, accelerate expansion and optimise their capital structures with less dilution to existing shareholders.

“Through Pothos Fund I, we are not just introducing a new investment product, we are helping to build a more complete funding ecosystem that supports innovation, encourages sustainable growth and creates long-term value for both businesses and investors,” says OSKVI chief executive officer Amelia Ong.

“Having worked with entrepreneurs across Southeast Asia for many years, we have seen firsthand how access to the right capital at the right time can make all the difference. As companies mature, their financing needs evolve, and venture debt provides a valuable option alongside traditional equity funding.”

The fund is the first dedicated venture debt vehicle launched jointly by OSKVI and Affin Hwang.

OSKVI brings more than two decades of venture-investing experience, having invested in, nurtured and exited more than 50 high-growth technology and enterprise companies across Southeast Asia.

Meanwhile, Affin Hwang brings capital-markets expertise, private-market structuring capabilities, fundraising and distribution strengths, as well as access to a broad network of institutional and sophisticated investors.