Baring Private Equity Partners Asia is getting ready to cross the finish line. The multi-stage investment firm whose reach extends from China into Southeast Asia will hold a final close on its second private equity fund at the end of June. The firm has now closed on $250 million since a first close last August, and will cap out at $300 million, slightly below its target of $350 million to $400 million.
Already, Fund II’s portfolio holds about 10 investments and expects to have about 25 when the fund is fully committed in about three years. Its first fund, Baring Private Equity Partners Asia I, closed with $300 million in its coffers in 1998 invested in 27 companies.
BPEP Asia’s strategy is to make investments in Asia-based companies that have management teams with Western training because its exit strategy is to sell to Western buyers. “The U.S.-trained teams are more culturally in tune and are a better fit at exit time,” says Jack Hennessey, the firm’s Silicon Valley-based partner. “The ones that aren’t Western trained aren’t interested in private equity anyway. They focus more on cash flow and handing businesses down to family members.”
The deal flow for BPEP has increased over the last decade as more and more Asian entrepreneurs come to the U.S. to study then head back to their homeland to do business.
The fund will invest about $15 million over the life of an investment. 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. However, in this market Hennessey says that BPEP will be focusing more on later-stage and buyout deals, at least for the time being.
BPEP’s team just added three people and a new office in India and a fifth partner in Hong Kong. Additionally, the firm has a three-person investment team in Singapore, and Foster City, Calif.-based Hennessey.
Contact Danielle Fugazy