Hong Kong-based private equity firm PAG is targeting to raise up to $1 billion for its third special situations fund, DEALSTREETASIA has learnt.
The firm had closed its second special situations fund at $1.4 billion in 2014.
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.
PAG declined to comment on its latest fund.
According to details shared at the Texas Permanent board meeting, PAG Special Situations Fund III will target an annual net return of 15 per cent. It will make investments of $10-40 million in markets including Australia, New Zealand, China, Japan, Southeast Asia and South Korea.
The fund has an investment period of three years and will begin liquidation by the sixth year. Its predecessor, PAG Special Situations Fund II, had generated a net internal rate of return (IRR) of 17.6 per cent, Texas Permanent’s real estate investment advisor StepStone Global noted during the board meeting.
PAG had on January 15 filed with the US Securities and Exchange Commission (SEC) for its latest special situations fund without specifying a target size. It will make a mix of debt and equity investments in public and private companies across targeted markets, a StepStone representative told the Texas Permanent board.
PAG Real Estate is led by managing partner Jon-Paul Toppino, who is based in Singapore. The real estate arm of PAG has invested more than $21 billion in over 6,500 properties across Asia. It manages a series of opportunity and core plus funds investing in properties in Japan, China and throughout the Asia-Pacific, PAG’s website shows.
Founded in 2002, PAG focuses on three core investment strategies – private equity, real estate and absolute return.
The investment firm’s assets under management total $30 billion, according to Private Equity International. Its funds include the $2.5-billion PAG Asia I and the $3.6-billion PAG Asia II. Last year, it raised $6 billion for its third Asia-focused buyout vehicle, PAG Asia III, exceeding its initial target of $4.5 billion.