Global private equity major Warburg Pincus Tuesday said it had raised $2.3 billion for a new financial services fund, exceeding its target of $1.6 billion.
This is the US-headquartered PE’s firm’s first fund that is dedicated to financial services. This vehicle – Warburg Pincus Financial Sector, L.P – that was launched in July this year, will be a companion fund to its $13.4 billion Warburg Pincus XII, L.P, that was closed in late 2015.
Warburg has invested about $8 billion in financial services since 2005.
“This new fund, in conjunction with our main, global fund, will enable us to invest behind both secular and cyclical trends that are driving the growth in the financial services sector, including increasing financial penetration in emerging markets; technology enablement; financial services outsourcing; and, in the event of a downturn, potential market dislocation opportunities,” Michael Martin, managing director and head of financial services at Warburg Pincus, said in a statement.
The China portfolio the PE firm currently has in the financial services sector include China Huarong Asset Management, Fortune Fund, Cango Auto Finance and Wacai. Its other recent deals in this space include picking up a stake in Banco Santander SA’s asset-management business, and leading a $220 million round in Mosaic which has a solar-panel financing business.
Warburg Pincus also has investments in Ascentium Capital, Au Financiers, Avaloq, Capital First Limited, DBRS, Mariner Finance, Network International, SCM Insurance Services, Triton International, Varo and Wacai. Past investments have included Aeolus Re, Arch Capital, DIME Bancorp, HDFC, Kotak Mahindra Bank, Mellon Bank, Metavante, National Penn Bancshares, Primerica, Renaissance Re, Sterling Financial, and Webster Bank, among others.
Since that time, the firm has committed over $11 billion to more than 95 portfolio companies across the developed and emerging market economies and in a diverse range of subsectors, including banks, specialty lenders, insurance, asset and wealth management, payments, core processing, and tech-enabled non-bank lending. The firm also has developed a particular expertise in the area of financial technology.
The Limited Partners (LPs), who have committed to the Warburg Pincus Financial Sector Fund include existing investors in Warburg Pincus’ funds and new investors to the firm, including leading public and private pension funds, sovereign wealth funds, insurance companies, endowments, foundations and high-net-worth individuals, it added in a statement.