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Asia-Based Private Equity Investors Targeting Buyout Funds – August 2012

by Wan Ping Chia

  • 24 Aug 2012
  • PE

Currently, 144 active private equity investors based in Asia have a preference for buyout strategies. Japan-based investors make up the largest proportion of this investor pool (26%), followed by China and South Korea, which contribute 18% each to the total number of Asia-based investors targeting buyout funds. Singapore and Hong Kong-based firms each make up a further 10% of the corpus. With the exception of China, it seems that investors in Asian countries that have a relatively more mature private equity universe find buyout funds more attractive.

The largest investor type in Asia seeking buyout opportunities is banks, which make up 17% of the total. Insurance companies (15%) and private equity fund of funds managers (13%) trail slightly as the next most common investor group in this pool. Other Asia-based investors interested in buyout vehicles include government agencies, investment companies, sovereign wealth funds, asset managers, pension funds and family offices.

Among Asia-based banks investing in buyout funds, Japan- and South Korea-based institutions together make up over half of the total, with each responsible for 30% of the total pool of investors. One example of an Asia-based bank investing in buyout vehicles is the Industrial Bank of Korea. With total assets of KRW 186tn, it mainly targets vehicles focused on South Korea.

With regards to Asia-based insurance companies targeting buyout opportunities, Japan (38%) and South Korea (33%) once again stand out as the geographic regions most significantly represented. However, when it comes to Asia-based private equity fund of funds managers investing in buyout funds, China-based managers make up a significant 50% of the total number. One example is Beijing Equity Investment Development Management, which is currently raising a USD-denominated fund of funds. While the private equity fund of funds manager mainly targets Beijing-based firms, it may invest in offshore enterprises opportunistically.

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