In a sign that prospects could be getting brighter for private-equity fund-raising, Baring Private Equity Asia has closed its fifth fund, easily beating its original target of $1.75 billion and doubling the firm’s assets under management.
The Baring Asia Private Equity Fund V closed with $2.46 billion in investor commitments, making it the largest PE fund launched in Asia since the outbreak of the global financial crisis.
BPEA affiliates now have around $5 billion in AUM, making the group one of the biggest dedicated Asian PE firms. Fund V was raised in less than five months, closed at its hard cap and was heavily oversubscribed, with more than $1 billion in excess demand, says the fund manager.
There are over 30 new institutional investors in the fund. Around 47% of the investor commitments came from North America, 28% from Asia and 25% from the Middle East and Europe.
The fund is 60% larger than BPEA’s Fund IV, which was one of the largest regional growth equity funds in Asia when it closed in February 2008 at $1.52 billion.
Fund V will deploy the same investment strategy targeting growing mid-sized businesses in Asia that require capital for expansion, recapitalisation or acquisitions. It will target companies in a broad range of sectors with operations in Greater China, India, Japan, Singapore, South Korea or Southeast Asia.
Commenting on the latest fund-raising, Jean-Eric Salata, Hong Kong-based founding partner and chief executive of BPEA, said: “We sensed from LPs around the world that, although Asia is at the top of many people’s lists for new private equity commitments, post financial crisis they are more focused than before on investing with firms that are established and that have been tested in difficult markets.
"This is our fifth fund, and Asia is no longer considered a new market," he adds, "so to this extent, our prior track record and our institutionalised platform was an important factor in the success of the fundraise.”
A veteran of the PE market, Salata recently outlined seven principles for PE exits at a conference in Hong Kong, as reported by AsianInvestor.
BPEA began its investment programme in the region in 1997. Since its inception, it has invested in 49 companies with transaction values totaling $1.8 billion.
The firm has an active portfolio of 30 companies with combined 2010 revenues of $6.7 billion and net earnings of $740 million. Revenues at its top 10 companies increased by 28% in 2010.
One of the firm’s largest investments was the buyout of Nord Anglia Schools, an operator of premium private schools focused on emerging markets, which was previously listed in London and was taken private by BPEA in 2008.