The $31.9-billion Texas County & District Retirement System (TCDRS) has approved a $100-million commitment into the latest Asia-focused vehicle of Hong Kong-based Baring Private Equity Asia, according to an investment disclosure.
The private equity firm is said to be raising up to $6 billion for its seventh Asia-focused fund.
Interestingly, TCDRS is also a limited partner for Hillhouse Capital’s latest Asia-focused fund, having committed $85 million into the vehicle last year.
A report by PEI indicated that the Baring Private Equity Asia had gathered over 80 per cent of the vehicle’s $5.5-billion target and had held the first close at $4.5 billion last July, after securing investments across 60 investors.
Baring Asia Private Equity Fund VII had also received a $200-million commitment from Texas Teacher Retirement System, $25 million from the Los Angeles City Employees’ Retirement System (LACERS), $25 million from Los Angeles Fire & Police Pension System and an interest from the Rhode Island State Investment Commission (RISIC).
Fund VII’s predecessor was closed at $3.99 billion in 2014. It has delivered a net internal rate of return of 18 per cent as of last July, based on the report by PEI. Last month, the private equity firm and its affiliated funds acquired South Korean consumer finance and leasing company Acuon Capital from New York-based J.C. Flowers & Co for an undisclosed sum.
Asia is seeing a record level of dry powder as investors are attracted to larger funds with strong track records. And despite the ongoing trade tensions between the US and China, Western pension funds continue to bet their capital on Asia-focused funds, with hopes for higher returns.
Early this year, the $75-billion Oregon Public Employees Retirement Fund (OPERF) made a $200-million commitment to China-based ClearVue Capital’s third fund, which seeks to raise $600 million in total. The pension fund had said it is looking to increase its PE allocation to Asia in the long-term at the expense of developed markets.
The New York State Common Retirement Fund (NYSCRF) committed $250 million to CVC Capital Partners’ fifth Asia buyout fund earlier this year. The vehicle will target control and co-control investments across Asia, primarily Southeast Asia.
DealStreetAsia had reported that the private equity firm is raising up to $5 billion for Fund V and is believed to have achieved the first close in the first quarter of this year. The vehicle will deploy $1 billion every year.
In July, TCDRS had also agreed to commit $95 million across three Asia-focused private equity funds – $55 million into Joy Capital’s third VC fund, and $40 million across two vehicles managed by Chinese early stage-focused venture capital firm Sky9 Capital.
This week, Shanghai-based Sky9 Capital announced it has closed two of its new VC funds with a combined $440 million in capital commitments. The firm was founded by former Lightspeed China Partners managing director Ron Cao.