US pension fund California Public Employees’ Retirement System (CalPERS) committed $380 million to PAG’s third Asia buyout fund in November last year, according to a board meeting document.
Last November, Hong Kong-based alternative investment firm PAG had closed its third Asia-focused private equity buyout fund at $6 billion after it was oversubscribed. The vehicle is said to have started deploying in the region last year.
The fund’s predecessor, PAG Asia II, which closed in December 2015 at $3.6 billion, has been fully invested. PAG Asia I was closed in September 2012 at $2.5 billion. Its first Asia fund achieved a 22.4 per cent net internal rate of return (IRR) as of March 31 this year, according to CalPERS.
PAG, an Asia-focused investor that manages $30 billion in capital, has funds under management across private equity, real estate and absolute return strategies. It operates in multiple markets including Australia, China, India, Japan, South Korea and Southeast Asia.
Another US pension fund, San Francisco Employees Retirement System (SFERS), had approved a $50-million check for PAG Asia III.
Earlier this month, DEALSTREETASIA had reported that PAG is looking to raise up to $1 billion for its third special situations fund. The target for PAG Special Situations Fund III, which will primarily target realty investments, was revealed at a recent board meeting of one of its limited partners (LPs), Texas Permanent School Fund. During the meeting, the LP agreed to make a capital commitment of up to $75 million to the latest PAG fund.
With a growing penchant for Asia-focused funds, CalPERS had also committed $300 million to TPG’s latest Asian fund, TPG Capital Asia VII. The fund achieved its final close at $4.6 billion on Monday two years after securing its first commitment — a $100-million check from the New Mexico State Investment Council (SIC) — in January 2017.
Besides SIC and CalPERS, other US pension funds that have committed to TPG Asia VII include the Employees Retirement System of Texas ($100 million) and the Teacher Retirement System of Texas ($150 million).
Private equity firms are raising increasingly large Asia-focused vehicles to invest further in the region. Last year, Hillhouse Capital raised a record $10.6 billion to invest in Asia, overtaking KKR’s $9.3-billion Asian Fund III. Hong Kong-based Baring Equity Asia is also looking to raise up to $6 billion for its seventh fund, after achieving a first close at $4.5 billion.