The Minnesota State Board of Investment (SBI) has committed $50 million to Warburg Pincus‘ China-Southeast Asia-focused private equity fund, the PE firm’s first vehicle with a dedicated focus on Southeast Asia.
In its quarterly updates, the Minnesota SBI said it has committed $50 million to Warburg Pincus China-Southeast Asia II LP as part of the more than $1 billion private markets investments commitments it approved at a board meeting on May 30, 2019.
Minnesota SBI is the state agency responsible for the investment management of various retirement funds, trust funds, and cash accounts of the US state.
In its quarterly updates, the Minnesota SBI said it has approved the private markets fund commitments amounting to more than $1 billion to the following: Apax Partners Fund X ($150 million), IK Investment Partners Fund IX (EUR135 million), KKR European Fund V ($100 million), Permira Fund VII (EUR135 million), TPG Capital Fund VIII ($150 million), Warburg Pincus China-Southeast Asia II ($50 million), LBC Credit Partners V ($100 million), and Energy & Minerals Group Fund V & Accordion ($150 million).
“All private markets investment commitments are subject to the amounts listed or a maximum of 20 per cent of the fund – whichever is less and must include at least four other investors participating in the fund. Each of these items is subject to final negotiations between the firm and the SBI,” the fund manager said.
The commitment from Minnesota SBI is in addition to the $100-million commitment approved by the New Jersey Division of Investment. Taipei-based Fubon Life Insurance has also committed $30 million to the fund.
Warburg Pincus China-Southeast Asia II LP is the PE firm’s first vehicle with a dedicated focus on Southeast Asia, a market it has been actively investing in for some time.
Warburg Pincus China-Southeast Asia II is expected to invest alongside Warburg Pincus Global in growth equity investments within China and Southeast Asia as well as Warburg Pincus Energy and Warburg Pincus Financial in the two markets, according to New Jersey Division of Investment documents.
The 2016-vintage Warburg Pincus China LP, the PE firm’s first China-focused fund, is now approximately 75 per cent deployed. The China fund invested $1.5 billion in 25 China and Southeast Asia startups, with its portfolio generating a gross internal rate of return (IRR) of 40 per cent and a 1.33x gross multiple on invested capital (MOIC).
Warburg Pincus has invested in 165 Asia‐based companies, generating a 1.9x gross MOIC and a 16.4 per cent gross IRR. More than 80 per cent of China and Southeast Asia investments made since Warburg Pincus IX Fund were startups or sourced through the Warburg Pincus network.
New York-based Warburg Pincus invests across geographies and sectors at all stages of a company’s life-cycle from its diversified global private equity funds. The firm established its first institutional fund in 1971 and over the last four decades has raised private equity funds with committed capital totalling more than $74 billion.
The PE firm focuses on five key sectors – energy, financial service, healthcare and consumer, industrial and business services, as well as technology, media and telecommunications.