TPG raises over $4.6b for seventh Asia buyout fund

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Global alternative asset firm TPG has reached the final close of its seventh Asia-focused private equity fund, TPG Capital Asia VII, at $4.6 billion, it said in a statement on Monday.

The firm claims that the commitments received exceeded its target. TPG Asia VII had secured its first commitment – $100 million from the New Mexico State Investment Council (SIC) – in January 2017.

“With Asia VII, we will continue to invest in opportunities that reflect our differentiated investment strategy, deep sector expertise, and focus on operational improvement. We look forward to continuing to deliver value for our investors while helping to build great new companies across Asia,” said TPG Capital Asia co-managing partner Ganen Sarvananthan.

Besides SIC, other LPs that have committed to TPG Asia VII include the Employees Retirement System of Texas ($100 million), California Public Employees’ Retirement System (CalPERS) ($300 million) and the Teacher Retirement System of Texas ($150 million).

Last December, it struck a deal with Lexington Partners-led secondary transaction for TPG Asia V and VI, which helped TPG to raise capital to achieve a final close for Asia VII, according to Private Equity International.

TPG Asia V is a 2007 vintage fund with $3.8 billion of committed capital while TPG Asia VI is a 2013 vintage fund with $3.3 billion in commitments. TPG was said to be exploring liquidity options that would enable investors to cash out both TPG Asia V and VI.

Based on the performance review by CalPERs, as of June 30, 2018, Asia V generated a 6.6 per cent net internal rate of return and 1.4x investment multiple.

According to TPG, Asia VII has so far deployed 40 per cent of the capital across 12 companies including Baidu’s wealth management and payments platform spin-off Du Xiaoman, Australia-based Healthscope’s Asian Pathology business, Indian agrichem firm UPL, and ASX-listed integrated pet care platform Greencross Limited.

Headquartered in the US, TPG was founded in 1992 and has more than $103 billion of assets under management. The firm established its first Asia-focused fund in 1994, and has offices across Beijing, Hong Kong, Mumbai, Seoul, Singapore and Melbourne. It has invested $11 billion in 88 investments across 13 countries through varied local and regional economic cycles.

With a significant investment focus on financial services, healthcare, consumer and TMT or new economy, 2019 will be TPG’s 25th year investing in Asia.

Dry powder is abundant in the Asian private markets as private equity firms are raising increasingly large vehicles to double down on the region.

Last year, Hong Kong-based PAG closed its $6-billion Asia fund while Hillhouse Capital gathered a record $10.6 billion, overtaking KKR’s $9.3-billion Asian Fund III. Bain Capital is said to have closed its Asia-focused fund at $4.65 billion last December.

Hong Kong-based Baring Private Equity Asia is also targeting to raise up to $6 billion for its seventh vehicle, having recently hit the first close at $4.5 billion. DEALSTREETASIA had first reported that CVC Capital Partners is targeting to raise $5 billion for its fifth Asia fund and is looking to hold the first close by the first quarter of 2019.

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Employees Retirement System of Texas commits $100m to TPG Asia VII