Partners Group has raised €1.5 billion ($2 billion) for a private equity direct investment programme, of which up to 40% will be put towards mid-market buyout deals in Asia.
It's part of a greater move into direct private equity buyouts by the Swiss alternatives firm, which has had a long history as a manager of fund of PE funds and secondaries vehicles.
The firm closed its direct investment programme last week after reaching a hard cap of €1.5 billion, with capital raised from institutional investors globally, including pensions, endowments, foundations and insurers.
They include Asia-based investors, although Partners Group declined to detail the proportion of capital attributable to them.
Up to 40% of the total capital will be put towards mid-market PE deals in Asia, where it will seek opportunities in the mid-market sector.
Partners Group believes “there is a mismatch between the size of the investment opportunity in that space and the available skill-set among existing GPs [general partners]”, says Andreas Baumann, who heads the firm’s Asian investment team.
“To date there have not been a huge number of GPs in this region with the ability to do that,” Baumann tells AsianInvestor.
Partners Group’s direct investment portfolios in Asia include India-based IT outsourcing provider CSS Corp, Hong Kong label maker Trimco and Saehwa International Machinery – a Korean producer of auto tyre-manufacturing equipment.
The alternatives firm aims to expand its operations internationally. “Many mid-market companies are operational only in their country of origin, or perhaps regionally,” says Baumann.
Offering companies an opportunity to expand globally could give it an edge against some regional PE players. Additionally, by structuring its direct investment capital pool as a platform – and not a co-mingled fund – it can deploy capital quickly with co-investors, reducing its dependence on leverage.
Partners Group previously raised €650 million for its direct investment platform in 2010, and €500 million in 2007.
The firm aims to expand its direct investments activity globally, adding to a growing PE trend whereby co-mingled funds are eschewed for platforms, which do not charge investors management and performance fees.
Partners Group recently teamed up with Tokyo-based Mizhuo Financial to offer global PE and infrastructure products to Japanese pensions.