Some might describe the general malaise hanging over the Asian economy as a crisis of confidence.
But things are looking up, particularly with the faith that U.S. investors have put in the Chinese and Indian manufacturing and service sectors.
CVC Asia Pacific announced plans last week to raise a $1 billion fund, the firm’s second dedicated Asia fund.
The new fund, CVC Asia Pacific II, would follow CVC’s first Asian fund, which closed in 2000 with more than $845 million. That fund is about 80% invested. CVC Asia Pacific II will invest in buyout deals in the Asian nations of China, Japan, Singapore and South Korea, as well as Australia.
The Hong Kong-based firm is a subsidiary of London’s CVC Capital Partners. CVC Capital’s LPs include the Alaska State Pension Investment Board, Bank of Scotland, CalPERS, CoPERA, Fleet Equity Partners, Illinois Municipal Retirement Fund, New York State Comptroller’s Office, Oregon State Treasury, Pacific Corporate Group, the University of Chicago and the World Bank/IFC.
CVC Asia Pacific has closed on 20 private equity deals in Asia since 2000, all but two of them being buyouts, according to Thomson Venture Economics (publisher of PE Week). One of its recent deals was the December 2003 buyout of Melbourne, Australia-based health care provider Affinity Health. Other companies in the firm’s buyout portfolio include the South China Printing Co., Tower Records Japan and Wong’s Circuits.
The fund-raising announcement comes on the heels of a study released in late January by the Asian Venture Capital Journal, which found that new private equity funds raised by Asian firms grew by 11% in 2003, pulling in a total of $3.3 billion. Japanese buyout funds led the growth as private equity investors put $7.3 billion into the land of the rising sun.
Meanwhile, other funds are getting under way, promising an invigorating shot in the arm to Asian private equity.
Baring Private Equity Partners Asia recently began raising a third fund. Baring Asia Private Equity Fund III has a target between $300 million and $400 million. It plans to invest in 10 to 20 buyout deals.
Baring’s new fund will invest in companies primarily in China, Hong Kong, India, Singapore and Taiwan, with half of the fund going into investments in China. Affinity Capital, Asiavest Partners and GS Private Equity – all Asian private equity firms – are planning to raise new funds, too.