NewQuest Capital Partners has reached a first close of about $500 million on its third fund, beating its initial target. Separately, it announced the the appointment of a new partner.
The fund has a target of $520 million, said a report in the Asian Venture Capital Journal. It was launched in November, and will invest in single and multiple-asset portfolios held by various entities.
There are major opportunities for secondary exits in China and India, where the market for initial public offerings — the path most investors take to exit with high returns — has been tepid.
The PE firm’s second fund closed at $316m in June 2014. That too had exceeded its target with participation from 10 limited partners.
Daizong Wong, a former managing director at CVC Capital Partners, will join NewQuest as a partner. Wang’s appointment will help NewQuest, which specializes in secondary transactions, to take advantage of the current scenario, until the IPO market rebounds.
“The Chinese private equity market has transformed substantially in recent years. Over the next 5-10 years, I see significant opportunity for a direct secondary focused strategy as the private equity market continues to mature,” Wang said in a statement.
NewQuest was created in 2011, when it bought Bank of America Corp‘s non-real estate private equity assets in Asia. It was backed by a group of investors including Paul Capital Partners, HarbourVest Partners, LGT Capital Partners and Axiom Asia. The fund had bought more than 20 different investments, mainly in high-growth markets of India and China, and raised a $400-million private equity fund.
Currently it has more than $700 million under management in two funds.
NewQuest invested $96 million in India’s Ujjivan Financial Services in March last year. It profitably exited China Hydroelectric Corporation in September, in a $542 million trade sale to Shenzhen Energy Co. Ltd.