Hong Kong-based HSBC Private Equity (Asia) Ltd. announced last week the first closing on its Private Equity Fund 3 Limited, with $350 million in commitments. The fund is slated for a final close next year. The fund has registered a $750 million dollar ceiling, but an HSBC spokesman expects the final fund size to be $500 million.
Interviewed in Hong Kong, Managing Director George Raffini, part of HSBC’s private equity group since its founding in 1989, said that fund-raising has been difficult since the firm launched efforts for the new fund in 2002.
Like the group’s other private equity funds, Private Equity Fund 3, is slated for Asian investments. The group’s typical allocation of investments in previous funds (80% for China and 20% for Southeast Asia) is projected for HSBC’s latest fund as well.
At present, the HSBC Private Equity group has $1.3 billion under management.
Raffini says that while in the past his group’s fund-raising was derived primarily from the United States, funds for the current first closing come from three regions (the United States, Europe and Asia) in approximately equal amounts.
The fund will focus on buyouts and company expansion investments.
Investing by the group varies from country to country. In Korea, for example, the firm invests primarily in electronics, but in China the company expects to invest in consumer companies.
Raffini says that his group, currently staffed with 25 professionals will expand with an additional two to four employees.