BRIC-Based Private Equity Fund Managers Focused on Buyout – January 2013

by Luke Goldsmith

  • 23 Jan 2013
  • PE

Preqin's Fund Manager Profiles database shows that there are 491 BRIC-based private equity fund managers, 113 of which include a buyout investment strategy. Collectively, BRIC-based fund managers that include buyout, either as an exclusive or wider investment strategy, have raised an aggregate $47bn in capital commitments over the last 10 years and have an estimated $23bn available in dry powder. Thirty-six percent of aggregate capital raised in the BRIC region is by firms that include a buyout investment strategy. In North America, 72% of the aggregate capital raised is by firms including a buyout investment strategy. Fifty-nine percent of BRIC-based firms undertake a venture capital investment strategy, compared to 19% of North America-based companies. This indicates the differences in investment strategy to suit the varying economic growth stages in the BRIC region compared to North America.

Looking at a breakdown of the BRIC region by country, 36 firms who pursue a buyout strategy are based in China, 30 in India, 24 in Russia and 23 in Brazil. In terms of aggregate capital raised in the last 10 years, China-based firms account for 51% of all the capital raised by the BRIC countries with Russia having the lowest proportion, accounting for only 14% of all the capital raised in this region.

Out of the top 10 firms to include a buyout investment strategy, based on aggregate capital raised in the last 10 years, five are based in China. The firm with the most capital raised is the China-based Hony Capital. They have raised $6.8bn in aggregate capital commitments over the last 10 years and have $3.5bn available in dry powder. The firm focuses on privatization and restructuring opportunities of State Owned Enterprises. Geographically, their main focus is on China. Hony Capital’s head office is based in Beijing with other offices in Hong Kong and Shanghai.

The second largest firm based on aggregate capital commitments raised in the last 10 years are Russia-based Baring Vostok Capital Partners, which has raised $3.7bn and has an estimated $1.6bn in uncalled capital. The firm was the first private equity firm created in Russia, and focuses on investing in former Soviet Union countries. Its industry focus includes oil and energy, branded consumer goods, telecommunications, media, services and technology. The firm’s funds have invested more than $2bn in over 60 portfolio companies and it has raised a total of $3.7bn in capital since their inception in 1994. It isthe biggest private equity firm in Russia and have raised over $3bn more than the second largest firm in Russia that pursues a buyout strategy, Elbrus Partners, which has raised $624mn in aggregate capital over the last 10 years.

The largest Brazil-based firm that undertakes a buyout strategy is Patria Investimentos and the largest India-based firm is ICICI Venture Funds Management. These firms have raised $2.3bn and $1.5bn respectively in aggregate capital over the last 10 years, and have £1.2bn and $227mn in estimated dry powder available respectively.

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