Asian private equity funds raise $9 billion in Q2

Asian private equity funds raised a collective $9 billion in Q2, with the $6 billion KKR Asia Fund II accounting for two-thirds of the region’s total, according to data provider Preqin.

Asia represented less than 10% of the $122 billion raised globally by PE funds that closed in Q2, up from the $90 billion that was raised worldwide during the same period in 2012.

While PE fundraising was up on a global basis, the sector in Asia showed signs of a slowdown.  

Although KKR’s Asia fund closed in December, it was only formally announced earlier this year, helping to provide a considerable boost to Q2 2013 figures for the region, which saw only 13 funds close. This compares to the $9.8 billion raised by 53 funds in the same period last year.

“Without the KKR fund, fundraising had significantly fallen both in terms of absolute numbers and number of funds in Asia,” Ivan Jincheng Han, Preqin managing analyst for Asia, tells AsianInvestor.  

By comparison, $67 billion was raised by 101 North America-focused funds closed in Q2, around double the figure for the same quarter last year, when 67 funds raised $38.5 billion.

European PE fundraising also came close to doubling, with 25 funds raising $32 billion in Q2, compared to the $17.7 billion in commitments by 30 vehicles last year.

KKR Asia Fund II was the sixth-largest PE vehicle to close in Q2 and the only Asia-focused fund to make it into the top 10 list, which was led by Warburg Pincus Private Equity XI, a global vehicle that announced its close in May at $11.2 billion – slightly short of its $12 billion target.

Meanwhile, private real estate funds which closed in Q2 have raised $17.3 billion on a global basis, up from $6 billion in Q1 and significantly higher compared to the $7.5 billion raised in Q2 2012.

Four Asia-focused funds raised $1.2 billion in Q2 this year, compared to the $900 million in commitments brought in by five funds during the same quarter in 2012.

The $683 million Citic Capital China Retail Properties Investment Fund was the biggest Asian property vehicle to close in Q2, and the sixth-largest globally.

The oversubscribed Lone Star Fund VIII – which targets distressed assets in the US, Europe and Japan – was the largest property fund to close in Q2, at $5 billion.

The data shows increasing momentum in the PE real estate fundraising market, notes Preqin. It bears out observations that institutions are returning the property sector, which they view as a safe haven.