Currently, there are 51 growth funds in market being raised by North America-based fund managers, collectively seeking a total of $16bn in capital commitments. Out of these funds, 41% have held at least one interim close and have cumulatively secured $3.4bn in investor capital. The average target size for North American growth funds is currently $337mn, with 11 of the funds in market looking to raise at least $500mn.
The total capital targeted by the top five funds in market equates to 35% of the $16bn total targeted. Interestingly, TPG is raising two of the funds in the top five funds in market; Shanghai TPG China Partners I and TPG Western China Growth Partners I. These two funds are both targeting CNY 5.0bn ($792mn) and are currently the largest growth funds being raised by North America-based fund managers that have a geographic focus on investments in Asia; they have both already held a first close.
Significantly larger than TPG’s two funds is the US-focused Pine Brook Road Partners II fund, the largest of the 51 growth funds in market. It is managed by Pine Brook Partners, a New York-based firm which has an industry focus on opportunities in the financial services and energy sectors. The fund held a first close on the 1st December 2012 and expects to reach its target of $2bn at the end of November this year.
With regards to industry focus, these 51 growth funds heavily invest in the healthcare and technology sectors, with just over half of all funds in market considering these sectors their primary focus. While the geographical focus of the 51 funds is unsurprisingly US-dominated, with 67% investing domestically, there is also a large focus on Asia. Twenty-two percent of the funds in market and three out of the top five largest funds seek to invest in Asia. In terms of capital, 30% of the $16bn targeted is raised with a geographical focus on Asia.
In the past 12 months, there have been 17 growth funds closed raised by fund managers based in North America, the largest of which was TPG Growth II. The fund closed slightly above its $2bn target in August 2012 and plans to invest globally in a large range of industries. The largest close in 2013 so far has been for the $250mn Princeville Investment Fund, managed by Softbank Capital. It is looking to make investments in Asia in the IT and technology sector.