Hong Kong-based private equity firm NewQuest Capital Partners is looking to raise $850 million for its fourth Asia-focused secondaries fund, according to a report by AVCJ.
The firm’s third secondaries fund, NewQuest Asia Fund III, closed at $540 million in 2016. Its second fund had made a final close in July 2014 with commitments of $326 million through two vehicles.
NewQuest’s funds primarily target companies across emerging Asia, focusing on minority and control transactions of $25-75 million per company, and $50-250 million for portfolio acquisitions.
Founded in 2011, NewQuest has been focused on secondaries deals in Asia since it was spun out of Bank of America Merril Lynch’s Asia Private Equity group. It oversees $1.25 billion worth of capital commitments.
Its portfolio companies operate in a wide range of sectors including clean energy, TMT, financial services, healthcare, consumer, industrials, and logistics.
In October 2018, DEALSTREETASIA had reported that the PE firm raised $65.1 million for a co-investment/ sidecar fund to invest alongside its third Asian secondaries fund.
2018 was an eventful year for NewQuest. In addition to raising a sidecar fund, global alternative asset manager TPG took a minority stake in the PE firm via its balance sheet — not via a fund — without disclosing the financial details of the deal.
The secondary market for alternative assets is slowly heating up, as Asia-focused funds’ proportion of the market nearly doubled in the first half of 2018, according to a report by advisory firm Greenhill & Co. Secondaries deals typically refer to the trading of pre-existing investor commitments to a fund or funds.
Last December, New York-based global alternative investment manager Lexington Partners had closed a GP-led secondary transaction for TPG’s fifth and sixth Asia-focused vehicles. The deal comprised a total capital commitment of about $1 billion, the first major liquidity offering process in Asia.
Earlier in February, Singapore’s sovereign wealth fund GIC was said to be shopping a portfolio of PE fund interests valued at about $1 billion. It had reportedly offloaded around $1.7 billion of equity stakes to Goldman Sachs Asset Management last July.