Asia-Focused Private Equity Growth Funds in Market – June 2016

by Benedict Pang

  • 02 Jun 2016
  • PE

Preqin’s Private Equity Online currently tracks 99 Asia-focused growth funds which are targeting an aggregate $41bn in commitments. Growth funds currently account for a quarter of both the number of funds and aggregate capital targeted by Asia-focused private equity funds in market, a much greater proportion than the more developed North American market, where growth funds account for just 5% of the number of funds in market and 3% of the targeted capital.

Over half (57%) of Asia-focused growth funds in market have yet to hold an initial close, with 38% reaching a  first close and the remaining 5% holding more than one interim close. Asia-focused growth funds in market have spent an average of 27 months on the road – a longer fundraising period than all growth funds in market globally (25 months).

Over three-quarters of Asia-focused growth funds in market are targeting investments in China (41%) or India (36%), while 11% and 10% of funds focus on Indonesia and Singapore respectively. Only 14% target investment in the ASEAN region. One Asia-focused growth fund in market seeking exposure to both China and India is Greater Pacific Capital II; the fund has a diversified industry focus and is targeting $700mn in commitments.

In terms of fund manager location, 87% of Asia-focused growth funds are raised by firms headquartered in the region. Of any single country, firms based in India manage the largest proportion (28%) of Asia-focused growth funds in market with China- and Hong Kong-based fund managers both accounting for 16%.

As shown in the chart above, the majority (56%) of Asia-focused growth funds currently raising capital seek investment in the information technology sector, while the consumer-related (53%) and healthcare (49%) industries are also targeted by large proportions of funds in market. Although most vehicles have interests in specific industries, 17% are sector agnostic. Lippo Tsinghua Holdings Fund is one Asia-focused growth fund in market that invests in the information technology sector; the fund is targeting CNY 10,000mn and focuses on East Asia, including China.

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