The Hong Kong-based private equity firm, Baring Private Equity Asia, announced on Tuesday that it’s closing its sixth Asia fund. The fund was able to attract a total of $3.99 billion, which is among the largest private equity funding in the region and shows that investors are still eager for the growth opportunities on offer in Asia.
The company had previously announced it is looking to fundraise $3.3billion with its fund, but managed to exceed its expectations. It reached its primary target within four months of launching last year. The new fund is also nearly 60% bigger than its previous Asia fund, according to Reuters.
Founding partner and CEO of Baring Asia, Jean Eric Salata, said in the official statement, “We are very grateful for the support we received from both our existing investors and the many new investors that chose to commit to Baring Asia VI. The success of the fundraise is a testament to the 18 years of hard work put in by our entire team in building our franchise and the strong execution capabilities of our portfolio company management teams in building great businesses.”
Looking for Targets in Asia
The firm will use the fund to continue its commitments of investing in the region. Baring Private Equity Asia also hopes to find European and North American companies looking to deepen their presence in Asia. Mr Salata was quoted by Finance Asia stating that the new approach “is a strategy that is a lot less competitive and harder to execute”. The company has previously invested in 72 companies with transaction values of $11 billion. It currently manages a portfolio of 30 companies across Asia and has assets worth of $9 billion under management.
Asian markets are currently providing many opportunities for traditional leveregad buyouts, which is something Baring Asia will hope to capitalise on. In the past Baring Asia has been keen to invest in India and Salata told Finance Asia the company will “continue to be very bullish on India”. One of the firm’s most recent deals in the region included the $670 million deal for Bushu Pharmaceuticals. The Japanese-based manufacturer is the number one contract manufacturing organisation (CMO) in the country.
Overtaking Carlyle Group’s Fund
Baring Private Equity Asia was able to capitalise on the strong investor sentiment and almost fundraised $4 billion with its Baring Asia Private Equity Fund VI. The $3.99 billion capital raised surpasses the $3.9 billion Carlyle Group was able to raise last year with its fourth Asia fund. It is still quite a bit behind from the region’s record held by KKR and Co. The private equity firm was able to fundraise $6 billion with its Asia fund in 2013. But the latest fund is the biggest ever by an Asian-based private equity firm.
Nevertheless, the fundraising round is another strong indicator that investors are still confident of the growth potential in Asia. The region has been a favourite among private equity investors for a while now and it looks like the interest will continue to develop further.