Non-Asia-Pacific private equity GPs raising funds focusing predominantly on Asia

by Wan Ping Chia

  • 04 May 2012
  • PE

Preqin’s Funds in Market database shows that private equity (excluding real assets) funds that have a  predominant Asia-Pacific focus and reached a final close between 2011 and May 2012 raised a total of USD 52.24 billion.

Eighty-four percent of the capital was garnered by fund managers located in the Asia-Pacific region, which includes Australasia and Asia. Fifty percent of the USD 52.24 billion was raised by China-based fund managers, and the second largest proportion of total capital, 15%, was raised by Hong Kong-based fund managers. Although the second largest number of GPs that closed predominantly Asia Pacific-focused funds between 2011 and present came from India (12%), the country only ranked third in terms of the proportion of capital raised (6%) when compared to its Asia -Pacific counterparts.

On the other hand, of the predominantly Asia-Pacific focused funds closed in 2011 to present, fund managers based outside of the Asia-Pacific region raised a total of USD 8.2 billion, contributing 16% of the total capital gathered. The largest number of non-Asia Pacific-based managers of these funds, 15, are based in the US. These US-based fund managers managed to garner an impressive USD 7.3 billion, contributing 14% of USD 52.24 billion total committed capital. Other non-Asia-Pacific fund managers contributing to this pool include those located in Denmark, Germany, Mauritius, Norway and Switzerland.

Preqin’s Funds in Market database tracks 309 funds currently on the road that are predominantly focused on Asia-Pacific. These funds are targeting more than USD 97.21 billion. Asia-Pacific-based fund managers are targeting USD 63.27 billion, forming 65% of the total fund raising target. At 26%, fund managers located in China are still seeking the largest proportion of the total targeted capital. This is followed by Hong Kong-based GPs, who are looking to gather 13% of the total fundraising figure. Like the previous year, the second largest number of fund managers raising capital for such funds are based in India (15%), however, in terms of the value of targeted capital, these India-based fund managers are ranked third when compared to all their Asia-Pacific counterparts. Indian fund managers are targeting 7% of the total fundraising figure.  
Fund managers located outside of Asia-Pacific are seeking to raise USD 33.94 billion, making up 35% of the total targeted figure. This is a noticeable increase in comparison to funds that were closed in 2011 to present. US-based fund managers rank the highest in terms of targeted fundraising capital when compared to other non-Asia-Pacific GPs. GPs headquartered in the US are seeking to raise USD 25 billion, about 26% of total fundraising target. This also puts them on par with China-based GPs raising Asia Pacific funds Overall, fund managers raising predominantly Asia-Pacific-focused funds represent a greater diversity of non-Asia-Pacific regions as well, including Canada, Italy, Spain, France, Israel and UK.

Of the predominantly Asia Pacific-focused vehicles raised by non-Asia-Pacific GPs that were closed in 2011 to present, one fund was raised by a Switzerland-based manager, two funds were managed by Germany-based managers, and 15 by US-based GPs. Looking at the predominantly Asia Pacific-focused funds on the road, Preqin is tracking eight such funds raised by Switzerland-based GPs, three by Germany-based GPs, and 44 by US-based GPs.

Interestingly, the two largest predominantly Asia-Pacific-focused funds that are currently on the road are managed by US-based GPs, namely TPG and Kohlberg Kravis Roberts (KKR). Both managers are seeking to raise USD 4 billion each for their buyout vehicles, TPG Asia VI and KKR Asia Fund II. The third largest Asia-Pacific-focused fund currently fundraising is PAG Asia I. It is managed by PAG Asia Capital, a Hong Kong-headquartered firm that is seeking USD 2.5 billion for its buyout fund. Also interesting to note is Actis 4, a growth fund managed by UK-headquartered Actis. While not predominantly Asia-Pacific-focused, the growth fund will include Southeast Asia, India and China within its investment focus and is seeking USD 3.5 billion.

From the breakdown of predominantly Asia-Pacific-focused funds in market by fund manager location, it may indicate an increasing awareness amongst non-Asia-Pacific GPs towards opportunities arising from the Asia-Pacific region. In the near future, there may be a further increase in fund managers based outside of Asia-Pacific raising funds that target the Asia-Pacific region, either as a risk diversification strategy, or to capitalise on the flourishing market.

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