Following last week’s Asia private equity blog, which examined Asia-based investors in growth funds, this week we consider the current state of play with Asia-focused growth funds. Investors looking for growth-stage opportunities in Asia have the option of 122 growth funds currently in market that have a primary focus on Asia. These vehicles are targeting just over $34.5bn in aggregate commitments.
Of these 122 funds, 2% are vintage 2010, 12% are vintage 2011 and 20% are vintage 2012. Sixty-six percent of these vehicles are vintage 2013, which illustrates that two-thirds of these funds have either held their first close only this year or haven’t held an interim close to-date. In terms of fund status, most of the Asia-focused growth funds in market are in the early stages of fundraising, with 55% yet to hold an initial interim close. A further 37% are at the first-close stage, 6% are at second-close, 2% have held a third-close and only 1% has held four interim closes to-date.
In terms of GP location, China and India are home to 55% of GPs currently raising Asia-focused growth funds, with 34% raised by GPs based in China and 21% headquartered in India. A further 11% of the GP pool is based in Hong Kong, 9% in the US and 8% in Singapore. Of the remaining 17% of GPs raising Asia-focused growth funds, 10% are based within Asia itself and 7% are headquartered overseas.
By regional focus, the majority of Asia-focused growth funds (57%), will include Greater China within their remit. Unsurprisingly, South Asia, which includes India, is the next most favored region for investment by these funds, with 33% seeking opportunities in the region. ASEAN is the third most sought after destination for Asia-focused growth funds, with 20% of Asia-focused growth funds looking to take advantage of opportunities in ASEAN’s frontier markets, which includes Indonesia. Conversely, the relatively developed markets of Japan and South Korea in North Asia do not garner much interest from growth-stage investors, with only 6% of these funds looking for investments in the region.