Baring Private Equity Partners Asia – a multi-stage investment firm whose reach extends from China into Southeast Asia – will hold a final close on its second private equity fund on June 30. With $210 million sealed in its coffers since a first close last August, Baring Private Equity Partners Asia Fund II will cap out in the $350 million to $400 million range.
Already, Fund II’s portfolio holds a dozen technology and communications-focused companies, like Celetron, an Indian electronic manufacturing services company, which was also backed by New Enterprise Associates, and NewPalm, a Chinese developer of mobile Internet enabling technologies.
BPEP Asia’s strategy is to make investments in Asia, usually investing $15 million over the life of an investment, and then to make an exit by selling the company to an U.S. buyer. About one-third of the fund’s capital is devoted to early-stage deals, another third goes into later-stage expansion rounds and the remainder is used to finance buyouts and corporate restructurings.
The fund, however, is opportunistic in its investment strategy, says Jack Hennessey, the firm’s only Silicon Valley-based partner. Over the last six months the firm has been targeting the assets of multinational distressed sellers who are restructuring their overseas operations in Asia, then merging the assets with complementary local businesses and holding the investment until it can be listed on an Asian exchange or sold back to a U.S. or European company. Its current strategy, one that Hennessey expects to follow for the next four quarters, is similar to one the firm employed during 1998’s Asian crisis. The $75 million worth of investments made by BPEP Asia in 1998 is now worth $250 million, he says.
About 40% of the fund’s capital will be invested directly in greater China – mainland China, Hong Kong and Taiwan. Another 25% will be invested in countries outside of Asia, countries in North America and Europe with a largely Asian customer base. The rest will be spread throughout Asia, including India, Malaysia, Singapore and South Korea.
BPEP’s team includes four Hong Kong-based partners, a three-person investment team in Singapore, and Foster City, Calif.-based Hennessey.
ING Barings is the fund’s majority shareholder. Invesco, MetLife and The Government of Singapore Investment Corp. also are limited partners in the fund.
Contact Carolina Braunschweig at: Carolina.Braunschweig@tfn.com