Growth Continues to be Prominent Strategy for Asia-Based Private Equity Fund Managers – October 2015

by Allison Polchinski

  • 23 Oct 2015
  • PE

Preqin’s Fund Manager Profiles database currently tracks 1,170 private equity managers that have growth as their primary investment strategy. These firms form part of 3,608 fund managers that consider growth investments as part of their investment preferences more broadly. The number of active growth equity-focused firms has been rising, with an average of 54 new growth-oriented fund managers entering the market each year since 2007 (based on vintage of first fund raised).

Despite a larger number of North America-based growth-focused fund managers, firms based in Asia have raised the most capital in the past 10 years. Preqin data shows that Asia-based firms have raised a combined $119bn over the past decade, compared to North America-based managers that have raised an aggregate $85bn. Additionally, Asia-based managers have an estimated $41bn available in dry powder for growth investments, compared with $35bn ready to be deployed by North America-based firms. US-based manager Summit Partners has raised over $7bn in the last decade; however, the most prominent Asia-based firm, CDH Investments, has collected a combined $8.4bn, with an estimated $3.8bn in dry powder.

While Asia-headquartered firms tend to dominate the growth equity market, there is a significant and increasing presence of the strategy in less prominent regions. NBK Capital Partners is the largest growth-centric manager based in the Middle East, focusing on investments within the region. NBK has raised $685mn over the past decade. Africa’s largest manager targeting growth investments is Creador Management Company, a Mauritius-based firm that makes investments across a range of industries, which has raised $711mn in the past 10 years. Gávea Investimentos, a South America-based firm with a broad investment scope in Brazil, is the largest growth equity-focused manager based in South America, with an aggregate $2bn raised over the last decade.

Although Asia-based firms continue to display strong fundraising statistics, growth equity has become significant on a global scale, with more growth firms established across a range of locations. Of the 266 growth funds currently in market, the majority are being raised by Asia-based managers (90 funds) and North America-based managers (82). However, Africa-based firms are currently looking to raise a notable 22 funds, targeting an aggregate $4bn. An additional 10 funds are in market from fund managers located in the Middle East, with these vehicles seeking $3.2bn. 

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