Dry Powder for Solely Asia-Focused Private Equity Investments – September 2012

by Wan Ping Chia

  • 07 Sep 2012
  • PE

In the last 10 years 490 fund managers with a sole focus on Asia have raised $103bn in aggregate capital to invest in the region. Only 7% of these GPs are located outside of Asia, indicating the prominence of Asia-based GPs investing in the region. While the non-Asia GPs are mainly made up of US-based firms, fund managers from countries such as the UK, UAE, France, Nigeria, Canada, Switzerland, and Austria have also joined the pool to capitalize on Asia-based opportunities. Currently, there is over $39bn in dry powder available for investments in Asia.

India is home to the largest proportion of the fund managers in this pool (27%). India-based GPs have raised $15bn in the last 10 years and have $6bn in dry powder available for Asia-focused investments. Japan-based fund managers rank as the second most prominent GPs targeting Asia-based investments, making up 12% of the GP pool. Japan-based fund managers have raised $12bn in capital commitments over the last 10 years and have $3bn in available dry powder for Asia-focused investments.

While only 11% of the GP pool is made up of China-based fund managers, these GPs have managed to garner the largest proportion of capital commitments ($31bn), which represents 30% of the capital raised in the last 10 years for Asia-focused funds. At $13bn, China-based fund managers also hold the largest proportion (34%) of dry powder available for Asia-focused opportunities. Hony Capital, a prominent buyout specialist based in China, closed a $2.4bn vehicle in December 2011, which targets China-based enterprises.

Hong Kong-based fund managers, which make up 10% of the GPs with a sole focus on Asia, also prove to be noteworthy. Having raised a total of $14bn in capital over the last 10 years, these fund managers are still left with half of that amount in dry powder to invest in Asia. Hong Kong-based PAG Asia Capital successfully closed Pacific Alliance Asia Special Situations Fund in September 2011, with $900mn in capital commitments. It is also currently fundraising for a $2.5bn buyout vehicle, PAG Asia I, which had a first close on $1.7bn in Q3 2011. PAG Asia Capital is one of the most prominent fund managers in Hong Kong and has a pan-Asia focus, including China.

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